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      Canada braces as tariff deadline looms and talks with US ‘chaos machine’ drag

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      After months of tariff threats from the US and escalating trade tensions that have sowed anger in Canada and fractured a once-close alliance, the country is now fast approaching a 1 August deadline to reach a deal with the Trump administration – which has shown no signs of backing down.And observers are keeping a close eye on negotiations this week to determine whether too large a chasm has grown between the countries, resulting in what could be an explosive end to what was decades of free-flowing trade.Canada is also in a highly vulnerable position, as it has closely intertwined its economy with the US’s, and is extremely reliant on a low-barrier trade environment, said William Huggins, an assistant professor in economics at McMaster University in Ontario.“Canada has tried to negotiate sort of forcefully from a position of not acquiescing to every demand, but by the same token, has also realised it’s not in the strongest position to do so … We’ve had to navigate carefully,” said Huggins.The Canadian public is also anxiously awaiting the deadline to strike up a deal. Economists and political scientists say the country’s prime minister, Mark Carney, was elected on the belief that he’s the right person to be at the helm of negotiations and lead Canada through a tenuous period with their southern neighbour.His successes or failures in this arena could affect public perception – as he has characterised his government as being the most adept in the crisis around its sovereignty due to the tariffs and Donald Trump’s persistent claims that he’d like to make Canada the 51st state.“[Carney] is in a situation where he doesn’t hold all the cards and whoever we put in was going to have to figure out a way through this … [His] ability to plan is severely limited by the chaos machine that is operating south of the border,” said Dennis Pilon, the chair of the politics department at York University in Ontario.On Monday, Carney said at a news conference on Prince Edward Island that the trade negotiations are at an “intense pace” and that they are “complex”. But he projected tentative optimism, stating that the negotiations are “tough” because the government is standing up for Canadian interests.“There is a landing zone that’s possible but we have to get there. We’ll see what happens,” he told reporters.But Trump spoke of the negotiations flippantly when asked by reporters outside the White House last Friday. “We haven’t really had a lot of luck with Canada … Canada could be one where there’s just a tariff, not really a negotiation,” he said.So far, much of the talks have happened behind closed doors. There was a glimpse into what could be the dynamic between Carney and Trump when the prime minister had his first meeting with the president in the Oval Office in early May. There were positive tones in both initially offering praise for each other, but the encounter quickly grew tense as Trump repeated his annexation claims, which were subsequently rebuffed by Carney.Since March, Trump has imposed several tariffs on Canadian goods and energy resources. There is a 25% tariff on all goods, excluding potash and energy products. But there’s separately a 10% tariff on energy resources, including potash. Additionally, there’s a further 50% tariff on steel and aluminum imports and a 25% tariff on autos and auto parts.At this stage, the tariffs have seemingly not delivered a significant blow to Canada’s economy, but that could change quickly. The Royal Bank of Canada noted in its June forecast that nearly 90% of Canadian goods are exempt from tariffs under the United States-Mexico-Canada Agreement (USMCA), the free trade deal that replaced Nafta in 2020 and which provides a degree of insulation.In an assessment published by the Toronto-Dominion Bank (TD) on Tuesday, it reported that energy exports have not been significantly affected by the tariffs, as most exports are compliant under the USMCA, and are therefore exempt from tariffs.Some of the insulation so far from tariffs could be from opening Canada up to other markets. TD said that in the past four months, Canadian businesses rapidly moved to reorient supply chains and export to non-US markets. Now about 30% of exports go outside the US – a level not seen since the pandemic, when TD notes there was disorientation in trade.But TD also warned that the negative effects of the tariffs might be beginning to emerge. It said that Canadian exports to the US are “generally underperforming” in tariff-targeted industries, particularly steel and automaking. Canada’s auto exports fell to levels not seen since late 2022, following the April imposition of tariffs. Automakers have also “slashed” production in response, it said.Andrea Lawlor, an associate professor of political science at McMaster University, said that while there haven’t been many layoffs or a complete reorientation of production lines yet, industries targeted by tariffs are preparing to do so.Lawlor also said that Carney has been prudent in his negotiation strategy so far, and right in waiting for deals to be brokered between the US and other nations, as they were this month with Japan and the EU, to help inform Canada’s strategy.skip past newsletter promotionafter newsletter promotionAnd despite concerns about marred relationships with First Nations people, pushing forward controversial infrastructure legislation and his quick scrapping of Canada’s digital services tax – which many, including top former diplomats, viewed as fawning capitulation toward Trump – the prime minister is still enjoying fairly positive polling in his term’s infancy.Abacus Data reported at the end of June that 52% of Canadians surveyed approve of the Carney government. The research firm states it shows that his post-election honeymoon period is “far from over”.Lawlor said the best outcome for Carney in the negotiations is a favourable trade deal – however, there has been signalling from Carney, in his discussion of “tough” talks so far, that Canadians may have to accept a baseline of tariffs.“Many Canadians just simply will not be satisfied if that is the outcome,” she said. But due to Carney facing limited criticism of his interactions with the Americans so far, Lawlor said she believes the prime minister will not face extreme negative blowback if he doesn’t trounce tariffs for good this week.But he will be more vulnerable if the tariffs start to place downward pressure on multiple industries, she said.As Canadians are waiting and watching for the Friday deal deadline, the real fears are around the cementing of a new world order and whether long-term business and consumer decisions need to be made in response, said Preetika Joshi, an assistant professor at McGill University in Quebec that specialises in taxation.“If you were a business owner and you knew Trump is going to be in power for only three, four years, would you necessarily make big, significant changes in your supply chain … or would you just wait it out?” she said.But given some grim messaging from those close to Carney – Canadians might be facing tough decisions. Dominic LeBlanc, the federal minister responsible for Canada-US trade, said last week there’s a lot of work ahead of them and minimised the 1 August deadline.“We’re going to continue to work toward the 1 August deadline,” said LeBlanc to reporters in Washington. “But all of these deadlines are with the understanding that we’ll take the time necessary to get the best deal,” he said.Deal or no deal, the negotiations might reveal that there isn’t a best-case scenario, said Joshi.“What we were used to before Trump, where there were very little tariffs, that reality is slightly over,” she said. “We’ll have to wait and see … but the reality is that there are going to be some tariffs.” More

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      ‘Cemetery of the living dead’: Venezuelans recall 125 days in notorious El Salvador prison

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      Arturo Suárez struggles to pinpoint the worst moment of his incarceration inside a prison the warden boasted was “a cemetery of the living dead”.Was it the day inmates became so exasperated at being beaten by guards that they threatened to hang themselves with their sheets? “The only weapon we had was our own lives,” recalled the Venezuelan former detainee.Was it when prisoners staged a “blood strike”, cutting their arms with broken pipes and smearing their bedclothes with crimson messages of despair? “SOS!” they wrote.Or was rock bottom for Suárez when he turned 34 while stranded in a Central American penitentiary prison officers had claimed he would only leave in a body bag?Suárez, a reggaeton musician known by the stage name SuarezVzla, was one of 252 Venezuelans who found themselves trapped inside El Salvador’s notorious “Cecot” terrorism confinement centre after becoming embroiled in Donald Trump’s anti-immigrant crusade.After 125 days behind bars, Suárez and the other detainees were freed on 18 July after a prisoner swap deal between Washington and Caracas. Since flying home to Venezuela, they have started to open up about their torment, offering a rare and disturbing glimpse of the human toll of President Nayib Bukele’s authoritarian crackdown in El Salvador and Trump’s campaign against immigration.View image in fullscreenSuárez said conditions inside the maximum security prison were so dire he and other inmates considered killing themselves. “My daughter’s really little and she needs me. But we’d made up our minds. We decided to put an end to this nightmare,” he said, although the prisoners stepped back from the brink.Another detainee, Neiyerver Rengel, 27, described his panic after guards claimed he would probably spend 90 years there. “I felt shattered, destroyed,” said the Venezuelan barber, who was deported to Cecot after being captured in Irving, Texas.Trump officials called the Venezuelans – many of whom had no criminal background – “heinous monsters” and “terrorists” but largely failed to produce proof, with many seemingly targeted simply for being Venezuelan and having tattoos.Norman Eisen, the executive chair of Democracy Defenders Fund, which is helping Rengel sue the US government for $1.3m, called the “abduction” of scores of Venezuelans a stain on his country’s reputation. “It is shocking and shameful and every patriotic American should be disgusted by it,” said Eisen, who expected other freed prisoners to take legal action.Suárez’s journey to one of the world’s harshest prisons began in Chile’s capital, Santiago, where the singer had moved after fleeing Venezuela’s economic collapse in 2016.One day early last year, before deciding to migrate to the US, Suárez watched a viral YouTube video about the “mega-prison” by the Mexican influencer Luisito Comunica.Bukele officials had invited Comunica to film inside Cecot as part of propaganda efforts to promote an anti-gang offensive that has seen 2%of the country’s adult population jailed since 2022. Suárez, then a fan of El Salvador’s social media-savvy president, was gripped. “Wouldn’t it be great if we could afford a package tour to go and visit Cecot?” he recalled joking to his wife. Little did the couple know that Suárez would soon be languishing in Cecot’s cage-like cells, sleeping on a metal bunk bed.View image in fullscreenAfter entering the US in September 2024, Suárez worked odd jobs in North Carolina. In February, three weeks after Trump’s inauguration, he was detained by US Immigration and Customs Enforcement (Ice) agents and, in mid-March, put on a deportation flight, the destination of which was not revealed. When the plane landed, its passengers – who were instructed to keep its blinds closed – had no idea where they were. The penny dropped when one detainee disobeyed the order and spotted El Salvador’s flag outside. “That’s when we understood … where we were heading – to Cecot,” he said.Suárez described the hours that followed as a blur of verbal abuse and beatings, as disoriented prisoners were frogmarched on to buses that took them to Cecot’s cell block eight.Suárez said the men were forced to shave their heads and told by the warden: “Welcome to hell! Welcome to the cemetery of the living dead! You’ll leave here dead!”As he was dragged off the bus, Suárez, who is shortsighted, said he asked a guard for help because his spectacles were falling off: “He told me to shut up, punched me [in the face] and broke my glasses.”“What am I doing in Cecot?” Suárez recalled thinking. “I’m not a terrorist. I’ve never killed anyone. I make music.”Rengel had almost identical memories of his arrival: “The police officers started saying we were going to die in El Salvador – that it was likely we’d spend 90 years there.”Noah Bullock, the head of the El Salvador-focused human rights group Cristosal, said activists had heard very similar accounts from prisoners in other Salvadoran jails, suggesting such terror tactics were not merely the behaviour of “bad apple prison guards”. “There’s clearly a culture coming from the leadership of the prison system to inculcate the guards into operating this way, [into] using dehumanising and physical abuse in a systematic way.”View image in fullscreenSuárez said the Venezuelans spent the next 16 weeks being woken at 4am, moved between cells holding between 10 and 19 people, and enduring a relentless campaign of physical and psychological abuse. “There’s no life in there,” he said. “The only good thing they did for us was give us a Bible. We sought solace in God and that’s why nobody took their own life.”The musician tried to lift spirits by composing upbeat songs, such as Cell 31, which describes a message from God. “Be patient, my son. Your blessing will soon arrive,” its lyrics say.The song became a prison anthem and Suárez said inmates sang it, one day in March, when the US homeland security secretary, Kristi Noem, visited Cecot to pose by its packed cells. “We aren’t terrorists! We aren’t criminals! Help!” the Venezuelans bellowed. But their pleas were ignored and the mood grew increasingly desperate, as the inmates were deprived of contact with relatives, lawyers and even the sun. “There came a point where we had no motivation, no strength left,” Rengel said.Only in mid-June was there a glimmer of hope when prisoners were given shampoo, razors and soap and measured for clothes. “They obviously wanted to hide what had happened from the world,” said Suárez, who sensed release might be close. One month later the men were free.Suárez said he was determined to speak out now he was safely back in his home town of Caracas. “The truth must be … heard all over the world. Otherwise what they did to us will be ignored,” said the musician, who admitted he had once been an admirer of Bukele’s populist campaigns against political corruption and gangs. “Now I realise it’s just a complete farce because how can you negotiate with human lives? How can you use human beings as bargaining chips?” Suárez said.A spokesperson for El Salvador’s government did not respond to questions about the prisoners’ allegations. Last week, the homeland security department’s assistant secretary, Tricia McLaughlin, dismissed prisoners’ claims of abuses as “false sob stories”.Suárez hoped never to set foot in El Salvador or the US again but said he forgave his captors. “And I hope they can forgive themselves,” he added. “And realise that while they might escape the justice of man they will never be able to escape divine justice.” More

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      Rubio moves to strip US visas from eight Brazilian judges in Bolsonaro battle

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      The US secretary of state, Marco Rubio, has reportedly stripped eight of Brazil’s 11 supreme court judges of their US visas as the White House escalates its campaign to help the country’s former president Jair Bolsonaro avoid justice over his alleged attempt to seize power with a military coup.Bolsonaro, a far-right populist with ties to Donald Trump’s Maga movement, is on trial for allegedly masterminding a murderous plot to cling to power after losing the 2022 election to his leftwing rival, Luiz Inácio Lula da Silva. Bolsonaro is expected to be convicted by the supreme court in the coming weeks and faces a jail sentence of up to 43 years.As the day of judgment nears, Trump has been increasing pressure on the court and President Lula’s administration. On 9 July, the US president announced he would impose 50% tariffs on all Brazilian imports as of 1 August, partly as a result of the supposed persecution of his ally. The move triggered an outpouring of nationalist anger in the South American country, with Lula describing it as “unacceptable blackmail”.On Friday, after federal police raided Bolsonaro’s house and fitted him with an electronic tag to stop him absconding, Rubio announced further moves in support of the defendant, who he claimed was the victim of a “political witch hunt”.Writing on X, Rubio said he had ordered visa revocations for the judge leading the investigation into Bolsonaro, Alexandre de Moraes, as well as “his allies on the court” and their family members. Rubio did not name his other targets but the Brazilian newspaper O Globo identified them as Luís Roberto Barroso, José Antonio Dias Toffoli, Cristiano Zanin, Flávio Dino, Cármen Lúcia Antunes Rocha, Luiz Edson Fachin and Gilmar Ferreira Mendes.Two other judges who were nominated to the court during Bolsonaro’s 2019-23 presidency, André Mendonça and Kassio Nunes Marques, reportedly avoided the sanction, as did a third judge, Luiz Fux.Lula denounced what he called “another arbitrary and completely groundless measure from the US government”.“Interference in another country’s justice system is unacceptable and offends the basic principles of national sovereignty and respect between nations,” the president said on Saturday, adding: “I’m certain that no kind of intimidation or threat – from whoever it may be – will compromise the most important mission of our nation’s powers and institutions, which is to act permanently to defend and safeguard the democratic rule of law.”The Trump strategist Alex Bruesewitz welcomed Rubio’s announcement, calling Bolsonaro’s treatment “sick and wrong”.Bolsonaro’s congressman son, Eduardo, thanked Rubio for his decision. “Thank you very much for this fight in favor of free speech, we do believe in the same values,” tweeted Eduardo, who has been living in the US since February and has reportedly been lobbying officials there over his father’s plight.Trump’s interventions have appalled millions of Brazilians who hope to see their former leader held responsible for the alleged coup attempt, which culminated in the 8 January riots in Brasília.Lula’s institutional relations minister, Gleisi Hoffmann, called the visa cancellations “an aggressive and petty retaliation” and “an affront to the Brazilian judiciary and national sovereignty”.Even influential rightwing voices have criticised the US’s attempt to meddle in one of the world’s most populous democracies by imposing 50% tariffs.On Saturday, the conservative Estado de São Paulo newspaper described Trump’s behaviour as “unacceptable external interference in Brazil’s domestic matters”. “Trump has not only attacked our national sovereignty … [but also] stained the history of diplomatic relations between the two largest democracies in the Americas,” the newspaper’s editorial board wrote.While the Bolsonaros have hailed Trump’s actions, they also appear to have grasped how the announcement of tariffs has backfired, allowing Lula to pose as a nationalist defender of Brazilian interests and paint the Bolsonaro clan as self-serving “traitors”.Lula, who had been facing growing public disillusionment and an uphill battle to win re-election next year, has enjoyed a bounce in the polls since Trump launched his trade war, the brunt of which will be borne by coffee producers and cattle ranchers in Bolsonaro-voting regions, such as São Paulo.Celso Rocha de Barros, a political columnist, said he suspected the Bolsonaros had been blindsided by the scale of Trump’s attack.“I think [Bolsonaro] wanted some kind of penalty – something he could use to say: ‘Look, Brazil’s being punished because of Bolsonaro’s persecution. But [the tariffs] went far too far … [they] screwed Bolsonaro’s base,” said Rocha de Barros, pointing to their potential impact on agribusiness.On Friday night, Bolsonaro’s senator son, Flávio, post on X, calling on Trump to suspend the tariffs and replace them with individual sanctions. Soon after, however, he deleted the post. More

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      Trump’s latest tariffs ‘are real’ unless deals improve, economic adviser says

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      Donald Trump has seen some trade deal offers and thinks they need to be better, Kevin Hassett, the White House economic adviser, said on Sunday, adding that the president will proceed with threatened tariffs on Mexico, the European Union and other countries if they don’t improve.“Well, these tariffs are real if the president doesn’t get a deal that he thinks is good enough,” Hassett told ABC’s This Week program. “But you know, conversations are ongoing, and we’ll see where the dust settles.“Hassett told ABC’s This Week program that Trump’s threatened 50% tariff on goods from Brazil reflect Trump’s frustration with the South American country’s actions as well as its trade negotiations with the US.On Thursday, Brazil threatened to retaliate against Trump’s plan with its own 50% tariff on US goods. “If he charges us 50%, we’ll charge him 50%,” Luiz Inácio Lula da Silva, the Brazilian president, told local news outlet Record, a day after Trump threatened to impose steep duties on Brazilian goods.Hassett’s comments come one day after Trump announced on his Truth Social social media platform that goods imported from both the European Union and Mexico will face a 30% tariff rate starting on 1 August, angering European capitals who had thought they had previously reached a deal with Trump. The prior deal would have involved a 10% tariff, five times the pre-Trump tariff, which the bloc already described as “pain”.The German chancellor, Friedrich Merz, on Sunday said he will work intensively with French president Emmanuel Macron and European Commission president Ursula von der Leyen to resolve the escalating trade war with the United States.“I discussed this intensively over the weekend with both Macron and Ursula von der Leyen,” Merz told German broadcaster ARD, adding he had also spoken with Trump about the matter.“We want to use this time now, the two and half weeks until August 1 to find a solution. I am really committed to this,” Merz said.Merz said the German economy would be hit hard by the tariffs, and he was doing his best to make sure US tariffs of 30% were not imposed.Unity in Europe and a sensible dialogue with the US president were now needed, Merz said, although countermeasures should not be ruled out. “But not before August 1,” he said.EU trade ministers are scheduled to meet on Monday for a pre-arranged summit and will be under pressure from some countries to implement €21bn ($24.6bn) in retaliatory measures, which are now paused until 1 August, the same day as Trump’s new deadline.Macron has called on the EU to “defend European interests resolutely” in response to Trump’s threats.French cheese and wine producers have warned of the damaging impact that Trump’s threatened 30% tariffs on imports from the EU would have on the country’s agriculture industry.A 30% duty would be “disastrous” for France’s food industry, said Jean-François Loiseau, the president of food lobby group ANIA, while Francois Xavier Huard, the CEO of dairy association FNIL, said: “It’s a real shock for milk and cheese producers – this is an important market for us.”In the interview with ABC News on Sunday, Hassett also said that Trump has the authority to fire the Federal Reserve chair, Jerome Powell, for cause if evidence supports that, adding that the Fed “has a lot to answer for” on renovation cost overruns at its Washington headquarters.Any decision by Trump to try to fire Powell over what the Trump administration calls a $700bn cost overrun “is going to depend a lot on the answers that we get to the questions that Russ Vought sent to the Fed”, Hassett said.Vought, the White House budget director, last week slammed Powell over an “ostentatious overhaul” of the Fed’s buildings and answers to a series of questions. Trump has repeatedly said that Powell should resign because he has not lowered interest rates, and the Wall Street Journal reported this week, citing anonymous sources, that Hassett is vying to succeed him as the Fed chair. More

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      Donald Trump announces 30% tariffs on goods from the EU and Mexico

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      Donald Trump announced on Saturday that goods imported from both the European Union and Mexico will face a 30% US tariff rate starting 1 August, in letters posted on his social media platform, Truth Social.The tariff assault on the EU came as a shock to European capitals as the European Commission and the US trade representative Jamieson Greer had spent months hammering out a deal they believed was acceptable to both sides.The agreement in principle put on Trump’s table last Wednesday involved a 10% tariff, five times the pre-Trump tariff, which the bloc already described as “pain”.EU trade ministers will meet on Monday for a pre-arranged summit and will be under pressure from some countries to show a tough reaction by implementing €21bn ($24.6bn) in retaliatory measures, which they had paused until midnight the same day.In his letter to Mexico’s leader, Trump acknowledged that the country had been helpful in stemming the flow of undocumented immigrants and fentanyl into the United States.But, he said, the country had not done enough to stop North America from turning into a “Narco-Trafficking Playground”.“We have had years to discuss our Trading Relationship with The European Union, and we have concluded we must move away from these long-term, large, and persistent, Trade Deficits, engendered by your Tariff, and Non-Tariff, Policies, and Trade Barriers,” Trump wrote in the letter to the EU. “Our relationship has been, unfortunately, far from Reciprocal.”Claudia Sheinbaum said on Saturday she is sure an agreement can be reached before Trump’s threatened tariffs take effect on 1 August.Speaking during an event in the Mexican state of Sonora, the Mexican president added that Mexico’s sovereignty is never negotiable.The higher-than-expected rate has dealt a blow to the EU’s hopes of de-escalation and a trade deal and could risk a trade war with goods of low margins including Belgian chocolate, Irish butter and Italian olive oil.The EU was informed of the tariff hike before Trump’s declaration on social media.In a letter to the EU, Trump warned that the EU would pay a price if they retaliated: “If for any reason you decide to raise your Tariffs and retaliate, then, whatever the number you choose to raise them by, will be added onto the 30% that we charge.”The European Commission president, Ursula von der Leyen, said the 30% rate would “disrupt transatlantic supply chains, to the detriment of businesses, consumers and patients on both sides of the Atlantic”.She said the bloc was one of the more open trading places in the world, and still hoped to persuade Trump to climb down.“We remain ready to continue working towards an agreement by August 1. At the same time, we will take all necessary steps to safeguard EU interests, including the adoption of proportionate countermeasures if required,” she said.Italy’s prime minister, Giorgia Meloni, called for “goodwill  … to reach a fair agreement that can strengthen the west as a whole. It would make no sense to trigger a trade war between the two sides of the Atlantic.” She added that both sides should avoid “polarisation”.The decision to hike the tariffs will also be another test of Trump’s ability to act in good faith in negotiations.Brussels will view the latest threat as a maneuver by Trump to extract more concessions from the EU, which he once described as “nastier” than China when it came to trade.Bernd Lange, head of the European Parliament’s trade committee, said on Saturday that Brussels should react immediately with countermeasures against Trump’s “outrageous” threat to hike tariffs on imports from the European Union.The EU had been negotiating intensively with Washington for more than three weeks and had made concessions, said Lange.“It is brazen and disrespectful to increase the tariffs on European goods announced on April 2 from 20% to 30%,” Lange told Reuters.“This is a slap in the face for the negotiations. This is no way to deal with a key trading partner.”While Trump indicated earlier this week that his new rates, also levelled against big economies including Japan, South Korea and Brazil, will not apply until 1 August, his latest tactic will create much distrust.Europe should make it clear that these “unfair trade practices” were unacceptable, Lange said.“We have postponed the first stage of our countermeasures for the time being, but I am firmly convinced that they must now be implemented immediately,” he said.“The first list of countermeasures must be activated on Monday as planned, and the second list should also follow quickly.”Brazil’s president, Luiz Inácio Lula da Silva, downplayed the impact of the threatened 50% tariff. Trump and Lula have indicated a willingness to negotiate, though Lula also said: “Trump could’ve called, but instead posted the tariff news on his website – a complete lack of respect which is typical of his behavior towards everyone.”Even if Trump had agreed to the proposal put on his table on Wednesday, further negotiations would have been needed in any case to create a legal text that can be formally registered by the US government, a process that is itself laden with risk.The UK took seven weeks to get its agreement registered with a promise included to reduce tariffs on car exports from 27.5% to 10%, but the agreed zero tariff for the British steel industry was omitted.Douglas Holtz-Eakin, a former congressional budget office director and president of the center-right American Action Forum, said the letters were evidence that serious trade talks had not been taking place over the past three months. He stressed that nations were instead talking among themselves about how to minimize their own exposure to the US economy and Trump.“They’re spending time talking to each other about what the future is going to look like, and we’re left out,” Holtz-Eakin said.He added that Trump was using the letters to demand attention, but, “in the end, these are letters to other countries about taxes he’s going to levy on his citizens”.The new tariff ends a turbulent week for the EU with Trump announcing an extension for talks until 1 August on Monday, then on Tuesday announcing the EU would “probably” receive a letter setting its new US tariff rate within 48 hours, claiming the bloc had shifted from being “very tough” to “very nice”.But diplomats viewed it as a mixed message as Trump stressed that he was still talking to negotiators from the bloc, but that he was displeased with European policies toward US tech firms. More

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      Lobbyists linked to Donald Trump paid millions by world’s poorest countries

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      Some of the world’s poorest countries have started paying millions to lobbyists linked to Donald Trump to try to offset US cuts to foreign aid, an investigation reveals.Somalia, Haiti and Yemen are among 11 countries to sign significant lobbying deals with figures tied directly to the US president after he slashed US foreign humanitarian assistance.Many states have already begun bartering crucial natural resources – including minerals – in exchange for humanitarian or military support, the investigation by Global Witness found.USAID officially closed its doors last week after Trump’s dismantling of the agency, a move experts warn could cause more than 14 million avoidable deaths over five years.Emily Stewart, Global Witness’s head of policy for transition minerals, said the situation meant that deal making in Washington could become “more desperate and less favourable to low-income countries”, which had become increasingly vulnerable to brutal exploitation of their natural resources.Documents show that within six months of last November’s US election, contracts worth $17m (£12.5m) were signed between Trump-linked lobbying firms and some of the world’s least-developed countries, which were among the highest recipients of USAID.Records submitted under the US Foreign Agents Registration Act reveal some countries signed multiple contracts, including the Democratic Republic of the Congo (DRC), which has endured mass displacement and conflict over its mineral wealth for years.The DRC is primed to sign a mineral deal with the US for support against Rwanda-backed rebels, providing American companies access to lithium, cobalt and coltan.The DRC – a former top-10 USAID recipient – signed contracts worth $1.2m with the lobbyists Ballard Partners.The firm, owned by Brian Ballard, lobbied for Trump well before the 2016 US election and was a leading donor to the US president’s political campaign.Somalia and Yemen signed contracts with BGR Government Affairs – $550,000 and $372,000 respectively.A former BGR partner, Sean Duffy, is now Trump’s transport secretary, one of myriad links between the US president and the lobbying firm.The government of Pakistan, a country that struggles with extreme poverty but is extremely rich in minerals, has signed two contracts with Trump-linked lobbyists worth $450,000 a month.Pakistan is now tied up in deals with multiple individuals in Trump’s inner circle, including the president’s former bodyguard Keith Schiller.Access to key natural resources has become a priority for Trump, particularly rare earth minerals. These are considered critical to US security, but the global supply chains for them are dominated by China.Other nations are offering exclusive access to ports, military bases and rare earths in exchange for US support.Although Global Witness said the revolving door between governments and lobbyists was nothing new, the organisation said it was concerned by the broader, exploitative dynamics driving new deals.Stewart said: “We’re seeing a dramatic cut in aid, combined with an explicit rush for critical minerals, and willingness by the Trump administration to secure deals in exchange for aid or military assistance.“Dealmaking needs to be transparent and fair. It is vital to recognise the role that international aid plays in making a safer world for all, and that aid should retain its distinct role away from trade.” More

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      Trump is bullying Canada over ‘digital taxes’ and Canada caved | Joseph Stiglitz

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      Donald Trump’s announcement calling off trade talks with Canada over its digital tax – and that he would impose retaliatory tariffs – demonstrates, once again, not only the president’s ignorance of economics and willful disregard of international norms and the rule of law, but also his willingness to use brute power to get whatever he and the oligarchs who support him want.He was wrong in labeling the tax as outrageous and “a direct and blatant attack on our country”. It is actually an efficient tax, well designed to ensure that the technology companies – the profits of which benefit the tech oligarchs who have come to dominate US policy – pay their fair share of taxes.It is accordingly disappointing that Canada appears to have caved, even more so as the prime minister had stood up strongly against Trump’s demand for Canada to become the 51st state. Regrettably, others are giving in – New Zealand and India have reportedly retreated.Trump’s bullying tactics have been in evidence since he took office. In January he threatened to double taxes on Australian citizens and companies in the US if they went ahead with their planned digital levy.Why digital taxes?Because digital companies operate all over the globe, and generate revenue in countries where they do not have a physical presence, they avoid taxation by shifting revenue and profit around the world. Some of the most egregious examples include Google moving $17bn to Bermuda, Apple owing France 10 years of back taxes, and the Italian government’s recent investigation of Meta over whether the firm owes €938m in VAT payments. Apple was so successful in avoiding taxes in Europe that it is estimated that it paid in some years a tax of just 0.005% on its European profits. Of course, when the most profitable companies in the world don’t pay their fair share of taxes, it just shifts the burden on to others.As more and more activity occurs online, and often from services provided from abroad, countries are losing revenue from sales, employment and profits taxes. Just because an activity is provided digitally doesn’t mean it should not be taxed; indeed, economists argue that digital taxes are among the easiest to administer, precisely because there is a digital record. The idea of the digital service tax is to help countries recoup revenue by taxing any kind of digital service provided from anywhere in the world: online sales, digital advertising, data usage, e-commerce or streaming services. They might include consumption taxes on internet purchases. Indeed, more than 18 countries have such taxes and some 20 others have proposed them.When it looked like the Organisation for Economic Co-operation and Development (OECD) would get a global agreement to raise corporate taxes, the agreement included a prohibition on digital taxes. Indeed, one of the reasons that the US was even willing to engage in these discussions on global taxation was to circumscribe others’ ability to impose such taxes. While that agreement was under discussion, the US government, influenced by its tech giants, strongly opposed these digital taxes and then US treasury secretary Janet Yellen spent a good deal of time calling up her counterparts and telling them not to impose them.But on 20 January, Trump issued an executive order saying that the agreement that had been negotiated over years and years “had no force or effect” in the US. As a result, more countries are now trying to decide whether to keep or adopt digital services taxes. Imposing them will incur the wrath of the US government and tech giants, but countries are well within their rights to do so. Indeed, there was a moratorium on levying digital taxes while there were some prospects of the OECD agreement going into effect; but with Trump, that prospect has all but disappeared, and that moratorium has come to end.Any country concerned with designing efficient, fair and easy-to-administer digital services duties should consider such taxes – indeed, they have the support not only of economists but of global civil society, including the Independent Commission on Reform of International Corporate Taxation (which I co-chair).skip past newsletter promotionafter newsletter promotionLong-established principles of international taxation hold that so long as a tax does not discriminate across countries – or corporations that are headquartered in different countries – which taxes a country imposes is a matter of national sovereignty. A country may be foolish, levying taxes that are not good for its economy, but so be it: that is a matter for the country to decide. In this case, the tax is actually good for the economy. What Trump has been doing has violated international norms in several ways: using the threat of tariffs or taxes against corporations headquartered in a country whose policy he dislikes, and walking away from what were supposed to be binding trade agreements, without even a pretense of using the mechanisms for dispute resolution embodied in those agreements.The question now: will countries cave in to these threats or can they stick together and collect the billions they are rightly owed? Make no mistake: what is at stake is more than money that will be collected. It is a matter of the rule of law, which Trump has trampled on so fiercely, both within the US and globally. The rule of law is essential not just for economic performance, but for social justice and democracy. And Canada’s capitulation to Trump’s unilateral move makes a mockery of the whole process by which international agreements are negotiated. Some were skeptical that the so-called “inclusive framework” was but a facade: others may have been at the table, but their voices were not heard. What has now happened verifies this: whatever the US wants, it gets.Canada should have stood up for its principles and national sovereignty, even in the face of such transparent bullying. The alternative now emerging is the law of the jungle, brute power and Canada becoming, de facto, the 51st US state.

      Joseph E Stiglitz is a Nobel laureate in economics, university professor at Columbia University and chief economist of the Roosevelt Institute

      Anya Schiffrin, senior lecturer at Columbia University’s School of International and Public Affairs, and her student Philip L Crane contributed to this piece More

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      in US Politics

      El Salvador’s president denies that Kilmar Ábrego García was abused in notorious prison

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      The president of El Salvador has denied claims that Kilmar Ábrego García was subjected to beatings and deprivation while he was held in the country before being returned to the US to face human-smuggling charges.Nayib Bukele said in a social media post that Ábrego García, the Salvadorian national who was wrongly extradited from the US to El Salvador in March before being returned in June, “wasn’t tortured, nor did he lose weight”.Bukele showed pictures and video of Ábrego García in a detention cell, adding: “If he’d been tortured, sleep-deprived, and starved, why does he look so well in every picture?”Ábrego García’s lawyers said last week that he had suffered “severe beatings”, sleep deprivation, malnutrition and other forms of torture while he was held in El Salvador’s notorious anti-terrorism prison, Cecot.Ábrego García said detainees at Cecot “were confined to metal bunks with no mattresses in an overcrowded cell with no windows, bright lights that remained on 24 hours a day and minimal access to sanitation”.His lawyers say he lost 31 pounds during his first two weeks of confinement.They said that, at one point, Ábrego García and four other inmates were transferred to a different part of the prison, “where they were photographed with mattresses and better food – photos that appeared to be staged to document improved conditions”.Bukele made no reference to whether the photos he showed to claim Ábrego García wasn’t mistreated were taken in a nicer part of the prison.Bukele recently struck a deal under which the US will pay about $6m for El Salvador to imprison members of what the US administration claims are members of MS-13 and Tren de Aragua, two gangs, for a year. According to Maryland senator Chris van Hollen, who traveled to El Salvador to meet with Ábrego García while he was detained there, the Trump administration intends to provide up to $15m to El Salvador for the controversial detention service.Bukele’s remarks came as the Tennessee judge in Ábrego García’s human-smuggling complaint ordered both sides to stop making public statements, after Ábrego García’s legal team accused the government of attempting to smear him without evidence as a “monster”, “terrorist” and “barbarian”.Lawyers for Ábrego García argued in a court filing that the government had violated a local rule barring comments that could be prejudicial to a fair trial.“For months, the government has made extensive and inflammatory extrajudicial comments about Mr Ábrego that are likely to prejudice his right to a fair trial,” Ábrego García’s lawyers said in a filing.“These comments continued unabated – if anything they ramped up – since his indictment in this district, making clear the government’s intent to engage in a ‘trial by newspaper’.”The US district judge Waverly Crenshaw issued the gag order in a two-sentence ruling.Ábrego García’s legal team has accused the government of trying to convict him in the court of public opinion since it acknowledged that it had mistakenly sent him to a prison in El Salvador despite a court order barring the move.“As Mr Ábrego’s plight captured national attention, officials occupying the highest positions of the United States government baselessly labeled him a ‘gangbanger’, ‘monster’, ‘illegal predator’, ‘illegal alien terrorist’, ‘wife beater’, ‘barbarian’ and ‘human trafficker,’” the filing said.skip past newsletter promotionafter newsletter promotionThe attorneys singled out the vice-president, JD Vance, who they said had lied when he called Ábrego García a “convicted MS-13 gang member”.They also said that Trump administration officials had made 20 more public statements about their client when he was arraigned, including in remarks by the homeland security secretary, Kristi Noem, and the deputy attorney general, Todd Blanche.They also said the attorney general, Pam Bondi, accused their client of crimes he hadn’t been accused of, including links to a murder case. In sum, the statements had asserted Ábrego García’s guilt “without regard to the judicial process or the presumption of innocence”, the filing said.According to the documents filed on Wednesday, officials within the prison acknowledged that Ábrego García was not a gang member, and that his tattoos did not indicate a gang affiliation.“Prison officials explicitly acknowledged that plaintiff Ábrego García’s tattoos were not gang-related, telling him ‘your tattoos are fine’,” according to the filing, and they kept him in a cell separate from those accused of gang membership.The prison officials, however, threatened to move Ábrego García into a cell with gang members whom officials said “would ‘tear’ him apart”.Separately, US prosecutors have agreed with a request by Ábrego García’s lawyers to delay his release from Tennessee jail over fears that the Trump administration could move to deport the Salvadorian national a second time.In a filing on Friday, lawyers for Ábrego García asked the judge overseeing a federal complaint that he was involved in human smuggling to delay his release because of “contradictory statements” by the Trump’s administration over whether he’ll be deported upon release.The justice department has said it plans to try the Maryland construction worker on the smuggling charges, but also that it plans to deport him but has not said when. 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