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    US allies worldwide decry Trump’s car tariffs and threaten retaliation

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    Governments from Tokyo to Berlin and Ottawa to Paris have voiced sharp criticism of Donald Trump’s sweeping tariffs on car imports, with several of the US’s staunchest long-term allies threatening retaliatory action.Trump announced on Wednesday that he would impose a 25% tariff on cars and car parts shipped to the US from 3 April in a move experts have predicted is likely to depress production, drive up prices and fuel a global trade war.The US imported almost $475bn (£367bn) worth of cars last year, mostly from Mexico, Japan, South Korea, Canada and Germany. European carmakers alone sold more than 750,000 vehicles to American drivers.France’s president, Emmanuel Macron, said on Thursday he had told his US counterpart that tariffs were not a good idea. They “disrupt value chains, create an inflationary effect and destroy jobs. So it’s not good for the US or European economies,” he said.Paris would work with the European Commission on a response intended to get Trump to reconsider, he said. Officials in Berlin also stressed that the commission would defend free trade as the foundation of the EU’s prosperity.Germany’s chancellor, Olaf Scholz, bluntly described Trump’s decision as wrong, and said Washington appeared to have “chosen a path at whose end lie only losers, since tariffs and isolation hurt prosperity, for everyone”.France’s finance minister, Eric Lombard, called the US president’s plan “very bad news” and said the EU would be forced to raise its own tariffs. His German counterpart, Robert Habeck, promised a “firm EU response”. “We will not take this lying down,” he said.Poland’s prime minister, Donald Tusk, said Europe would approach the US with common sense but “not on our knees”. Good transatlantic relations are “a strategic matter” and must survive more than one prime minister and one president, he said.The European Commission president, Ursula von der Leyen, described the move as “bad for businesses, worse for consumers” because “tariffs are taxes”. She said the bloc would continue to seek negotiated solutions while protecting its economic interests.The British prime minister, Keir Starmer, said the tariffs were “very concerning” and that his government would be “pragmatic and clear-eyed” in response. The UK “does not want a trade war, but it’s important we keep all options on the table”, he said.His Canadian counterpart, Mark Carney, said on social media: “We will get through this crisis, and we will build a stronger, more resilient economy.”Carney later told a press conference that his administration would wait until next week to respond to the new US threat of tariffs, and that nothing was off the table regarding possible countermeasures.He would, he added, speak to provincial premiers and business leaders on Friday to discuss a coordinated response.“It doesn’t make sense when there’s a series of US initiatives that are going to come in relatively rapid succession to respond to each of them. We’re going to know a lot more in a week, and we will respond then,” he said.One option for Canada is to impose excise duties on exports of oil, potash and other commodities. “Nothing is off the table to defend our workers and our country,” said Carney, who added that the old economic and security relationship between Canada and the US was over.South Korea said it would put in place a full emergency response to Trump’s proposed measures by April.China’s foreign ministry said the US approach violated World Trade Organization rules and was “not conducive to solving its own problems”. Its spokesperson, Guo Jiakun, said: “No country’s development and prosperity are achieved by imposing tariffs.”The Japanese prime minister, Shigeru Ishiba, said Tokyo was putting “all options on the table”. Japan “makes the largest amount of investment to the US, so we wonder if it makes sense for [Washington] to apply uniform tariffs to all countries”, he said.Reuters and Agence-France Presse contributed to this report More

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      Tariffs can help US workers. But Trump’s doing them all wrong | Dustin Guastella

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      In the run-up to the 2024 election, a lot of people were ringing alarms about Donald Trump’s tariffs. Kamala Harris called Trump’s policies a “tax on the American people” and warned of sky-high prices. According to the Nobel prize-winning economist Joseph Stiglitz, they are “very bad for America and for the world”. His fellow Nobel laureate Paul Krugman called them “small, ugly, and stupid”. More recently, the whirlwind tariff drama of the past two months – first a 25% tariff on Mexico and Canada, then a 30-day “pause” on that policy, a plan to raise tariffs on steel, aluminum and agricultural goods, plus an across the board tariff hike on China – has generated yet more frenzied debate about the danger of tariffs.Observers aren’t wrong to criticize the US president’s policies. His proposed tariffs seem unlikely to improve what ails the US economy. Worse, applying tariffs as broadly as he’s proposed, and without any supplementary industrial strategy, does risk needlessly raising prices while acting like a big corporate giveaway. Yet, despite what elite economists say, tariffs can be sound, and progressive, economic policy.In fact, liberals might be surprised to learn that during his administration Joe Biden actually raised the highest tariffs in recent American history: a 100% tariff on Chinese electric vehicles. Why? Because tariffs work.Tariffs are, simply put, taxes on certain imported goods, paid by the importer. The goal is to make foreign products more expensive than their Made-In-USA counterparts. This is why people refer to tariffs as “walls” that help “protect” domestic industry from global competition. Right now, China quickly and efficiently produces fleets of electric vehicles that are – thanks to the low cost of Chinese labor – a lot cheaper than the EVs made in the United States. Without tariffs, it would be impossible for US-made models to compete. Since making electric cars was a big goal for Biden, his administration raised an eye-watering tariff that would double the price of any Chinese-made import.The EV example is useful because it demonstrates the difference between Biden’s tariff policies and Trump’s.Trump has, for the most part, not focused on raising tariffs on particular imported goods but instead on all goods coming from certain countries. Mexico and Canada face across-the-board tariffs; China was already facing 10% tariffs, doubling to 20%. But raising the prices of all products from these countries doesn’t help develop any particular line of US manufacturing. Tariffs like these are both too broad and too small to make a positive impact. A 20% tariff on all Chinese goods might make it more expensive for Americans to continue to buy certain things from China. But nothing in that policy encourages Americans to buy American-made products; they might just as well find a Vietnamese supplier to avoid the tariff while continuing to reap the benefits of cheap labor. Moreover, it’s possible that some Chinese manufacturers will simply eat the additional costs and sell their goods at slightly slimmer profit margins. Or, equally likely, they will try to avoid the tariffs by having other companies assemble their products in neighboring countries before sending them to the US. As is, Trump’s country-based tariffs seem more like a geopolitical tool than an economic one. Frankly, they don’t make much sense if the goal is to bring factories home.Trump’s steel and aluminum tariffs are closer to the mark. By making all steel imports (regardless of national origin) subject to the same tariff, the policy could succeed in making US steel comparatively cheaper for domestic buyers.View image in fullscreenYet even this wouldn’t make US steel bigger or better, or make its production more efficient. Nor would it necessarily raise the wages of steel workers. Pure and simple protectionism will benefit existing US steel manufacturers, but no one much beyond that. Without the government stepping in to develop new manufacturing – encouraging the adoption of the latest techniques to make a superior product, actively building new demand for American steel, or providing social guarantees for steel workers – tariffs alone risk protecting a sick industry without much upside.So what would a labor-forward tariff program look like? It would combine tariffs with big investments in infrastructure to help steer industry, and the country, into better economic health.For steel, such a fix isn’t hard to imagine. The US benefits from being a continental-sized country, with hundreds of thousands of bridges, school buildings, libraries, miles of rail and highway. All of those things are made with steel. And all of them are falling apart. Major new investments in infrastructure upgrades would provide the tariff-protected steel industry the new demand needed to grow, and provide the requisite scale for industrial dynamism.In exchange, steel firms should be required to provide family-sustaining wages and benefits, and promise to stay neutral in union elections. Not only this, but the government should have some say in actually directing the production process. New steel plants should be built in places that need jobs, not isolated tax-free industrial parks, but in the very same areas that were obliterated by deindustrialization. That is, production should be directed, first and foremost, toward public use and social ends.Some might wonder: why bother with such an expensive experiment?Manufacturing is still a huge part of the US economy and it is among the only sectors that consistently provides high wages for a large base of workers. Protecting that industrial foundation is essential not only for those workers, but for the health of other sectors too. When a factory closes, it’s not just the high-wage blue-collar workers who are thrown out of jobs. So are all the middle-income truck drivers who deliver the goods. And all the high-skilled mechanics who fix the machines. Not to mention the servers and cooks who staff now empty local restaurants. The only businesses that grow in the wake of a factory closing are those related to opioids and alcohol.Since Nafta was signed, tens of thousands of factories have closed in the US. Millions of largely union jobs have been lost. This fact alone explains so much of the populist revolt against globalization. And while it’s unlikely that we could ever return to the industrial output of 1946, is it that hard to imagine returning to 1994? If Pearl Jam is still making albums, can’t the US still make steel?Rebuilding our manufacturing capacity will be a big part of building a better country. And tariffs – deployed wisely with big investments – are an indispensable tool for doing so.

      Dustin Guastella is a research associate at the Center for Working Class Politics and the director of operations for Teamsters Local 623 More

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      China and Canada retaliate after Trump trade tariffs come into effect

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      China and Canada unveiled retaliatory measures against the US after Donald Trump imposed his sweeping tariffs plan at midnight US time, despite warnings it could spark an escalating trade war.US tariffs have come into force of 25% against goods from Canada and Mexico, the US’s two biggest trading partners, and 20% tariffs against China – doubling the levy on China from last month.The duties will affect more than $918bn-worth (£722bn) of US imports from Canada and Mexico.China on Tuesday said it would impose fresh tariffs on a range of agricultural imports from the US next week. Its finance ministry said additional 15% tariffs would be imposed on chicken, wheat, corn and cotton, with further 10% tariffs on sorghum, soya beans, pork, beef, aquatic products, fruits, vegetables and dairy products.The Canadian prime minister, Justin Trudeau, said Ottawa would respond with immediate 25% tariffs on C$30bn-worth ($20.7bn) of US imports. He said previously that Canada would target US beer, wine, bourbon, home appliances and Florida orange juice.Tariffs will be placed on another C$125bn ($86.2bn) of US goods if Trump’s tariffs were still in place in 21 days.“Tariffs will disrupt an incredibly successful trading relationship,” Trudeau said, adding that they would violate the US-Mexico-Canada free trade agreement signed by Trump during his first term.Mexico’s president, Claudia Sheinbaum, was expected to announce her response on Tuesday morning, the country’s economy ministry said.Asian markets were down – after sharp falls in US markets on Monday – as Japan’s Nikkei fell 1.6%, Taiwan’s benchmark TWII index was off 0.5% and Hong Kong’s Hang Seng was down 0.$%.The Canadian dollar and the Mexican peso fell to their lowest levels in a month on Tuesday.In Europe, the FTSE 100 dropped by 57 points, or 0.65%, at the start of trading to 8,813 points, a day after rising more than 8,900 points for the first time. France’s CAC 40 fell 0.9% and Spain’s Ibex was down 0.8%.Trump and his allies claim that higher tariffs on US imports from across the world will help make America great again by enabling it to obtain political and economic concessions from allies and rivals on the global stage.Businesses, inside the US and worldwide, have warned of widespread disruption if the Trump administration pushes ahead with this strategy.Since winning November’s presidential election, the president has focused on China, Canada and Mexico, threatening the three markets with steep duties on their exports unless they reduced the “unacceptable” levels of illegal drugs crossing into the US.skip past newsletter promotionafter newsletter promotionWhile he slapped a 10% tariff on China last month, Trump has repeatedly delayed the imposition of tariffs on Canada and Mexico. The president has pledged to bring down prices in the US, but economists have warned that consumers in the country could be aversely affected by his trade plans.A 25% tariff on Canada and Mexico and a 10% levy on China would amount to “the largest tax increase in at least a generation”, according to the Peterson Institute for International Economics, a thinktank, which estimated such a move would cost the typical US household more than $1,200 each year.Trump has vowed to go further, threatening to introduce “reciprocal” tariffs on countries that have their own duties on goods made in the US. He has said these will come into effect as soon as next month.China’s finance ministry said in a statement: “The US’s unilateral tariff increase damages the multilateral trading system, increases the burden on US companies and consumers, and undermines the foundation of economic and trade cooperation between China and the US.”The ministry said products shipped from the US to China that departed before 10 March and arrived before 12 April would not be subject to the tariffs.Trump has said the tariffs on China are because the government has failed to stop illicit fentanyl entering the US, which Beijing says is a “pretext” to threaten China.“China opposes this move and will do what is necessary to firmly safeguard its legitimate interests,” a foreign ministry spokesperson, Lin Jian, said.Chris Weston, an analyst at the brokerage Pepperstone, said: “Market anxiety levels have been dialled up, and we see traders having to react aggressively and dynamically to the deluge of headlines and social posts confirming that tariffs on China, Mexico and Canada are to be implemented in full and as threatened.” More

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      China promises ‘countermeasures’ after Trump threatens additional 10% tariff

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      Donald Trump has threatened China with an additional 10% tariff on its exports to the US, prompting a promise of “countermeasures” from Beijing and setting the stage for another significant escalation in the two governments’ trade war.The US president also claimed he planned to impose tariffs on Canada and Mexico starting next Tuesday, having delayed their imposition last month after talks with his counterparts.Posting on Truth Social on Thursday, Trump said illicit drugs such as fentanyl were being smuggled into the US at “unacceptable levels” and that import taxes would force other countries to crack down on the trafficking.“We cannot allow this scourge to continue to harm the USA, and therefore, until it stops, or is seriously limited, the proposed TARIFFS scheduled to go into effect on MARCH FOURTH will, indeed, go into effect, as scheduled,” the Republican president wrote. “China will likewise be charged an additional 10% Tariff on that date.”If Trump makes good on this latest threat, the move would further strain relations between the US and its largest trading partners.In response, China’s commerce and foreign ministries on Friday vowed to retaliate if Chinese companies were affected by the tariffs, accusing the US of using fentanyl as a “pretext” to threaten China.“Such behaviour is purely ‘shifting blame and shirking responsibility,’ which is not conducive to solving its own problems,” a commerce ministry spokesperson said. “If the US insists on proceeding with this course of action, China will take all necessary countermeasures to safeguard its legitimate rights and interests.”Canada and Mexico have promised to retaliate if the US imposes tariffs on their exports. China hit back swiftly when Trump imposed a 10% tariff on its exports earlier this month.The Trump administration has repeatedly raised the threat of tariffs, vowing to rebalance the global economic order in the US’s favor. A string of announced measures have yet to be introduced, however, as economists and businesses urge officials to reconsider.The duties on imports from Canada and Mexico have been repeatedly delayed; modified levies on steel and aluminum will not be enforced until next month, and a wave of “reciprocal” tariffs, trailed earlier this month, will not kick in before April.This week, the US president vowed to slap 25% tariffs on the EU, claiming the bloc was “formed to screw the United States”, although details remain sparse. Duties will be applied “generally”, Trump said, “on cars and all other things”.The prospect of escalating tariffs has already thrown the global economy into turmoil – with consumers expressing fears about inflation worsening and the auto sector possibly suffering if the US’s two largest trading partners in Canada and Mexico are slapped with taxes.The prospect of higher prices and slower growth could create political blowback for Trump.Associated Press contributed reporting More

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      UK marketplace sellers face ‘second Brexit’ hit from Trump’s US import rules

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      Many UK-based independent sellers on marketplaces such as eBay and Amazon could suffer a significant hit to US sales from planned changes to import rules under Donald Trump, with experts comparing the impact to a second Brexit.The new rules, which mean all parcels originating or made in China and being sold into the US must pay import duty – of as much as 15% on fashion items – and an additional 10% tariff, are also expected to impact bigger online clothing retailers such as Asos and Boohoo.The changes were introduced at the start of February in an attempt to protect US retailers from a surge in competition from the likes of Chinese online marketplaces Shein and Temu, but were indefinitely paused after the US customs service struggled to cope with the massive increase in parcels requiring checks last week.However, they are expected to be implemented within the coming months, potentially driving up prices for US consumers and hitting sales for online retailers.Before the change, parcels with a value of less than $800 (£635) shipped to individuals in the US were exempt from import tax and did not pass through the usual customs checks. That scheme, originally designed to help smooth online shopping, is being revoked after it emerged that the number of shipments under the “de minimis” rules had ballooned to more than 1bn, valued at $54.5bn by 2023 – most of them from China or Hong Kong via firms including Shein and Temu.“You are looking at an increase of $30 to $50 per consignment [group of parcels],” said Brad Ashton at the advisory firm RSM. “It is creating a perfect storm for online retailers putting goods into the US market. It has a lot of the hallmarks of Brexit in terms of its potential impact on small traders.“Businesses will see their margins eroded because costs will increase. We may get to a point where the changes make a UK business uncompetitive in selling to the US.”The widespread use of Chinese factories for many British brands, particularly in fashion, means businesses such as Asos and Boohoo will be drawn in, as well as many UK independent marketplace sellers.It will not just affect goods made in China and then sent from the UK, but potentially a much wider array, as any package containing even one product made in China may have to pay import tax and pass through customs checks, further increasing costs, according to experts.There is also an expectation that the de minimis rules will eventually be scrapped for all imports, no matter their origin.About $5bn worth of parcels were exported to the US from the UK under de minimis rules in 2021, according to a Congressional Research Service analysis of data from US Customs and Border Protection. About 80% of that was estimated to be related to online retail, with fashion likely to be a large proportion of it.Chris White, at the logistics company Fulfilmentcrowd, said that during the brief period when the rules were in place in early February, one-third of the parcels it shipped to the US from the UK were found to be of Chinese origin and subject to the new taxes.Fast-fashion specialists Asos and Boohoo sell about £300m of clothing a year to the US. Both are already struggling to compete with the rise of Shein and high street retailers, which have revived after the Covid pandemic. John Stevenson, a retail analyst at Peel Hunt, said Asos and Boohoo would have to “adjust prices or take a view on [the] profitability of operating in the US”.As well as the higher tax charges, customs checks required after the rule change will add as much as two days to the processing of orders, making UK retailers less competitive with US-based operators on the speed of delivery.skip past newsletter promotionafter newsletter promotionStevenson said the hit to Asos and Boohoo was “not business-critical” in the way it could be for Shein or Temu, which he believed were heavily reliant on the tax benefit, but that it would have an impact.In the short term, online sellers will probably have lower sales because of uncertainty among US shoppers over possible taxes. White said that during the period when the new rules were in place, similar parcels were loaded with different levels of duty as local customs officers made different decisions.He said a further element of the rule change might be to expose brands that were “trading on an image of being British or European” as being “made in China and not Savile Row”, potentially damaging their appeal.There would be “lots of crossed fingers and puzzled faces” over the changes in legislation, with retailers potentially opening more US warehousing or, longer term, to switch sources of supply, White added.Boohoo closed its US warehouse earlier this year, and Asos is scheduled to close its facility there in November. However, a reversal could be on the cards if the de minimis rules are confirmed. Many fast-fashion companies have already diversified their supply chains – making more in India, Bangladesh or Turkey. Trump’s tax changes could accelerate this further.Shein is reportedly incentivising Chinese suppliers to set up in Vietnam, according to a report by Bloomberg.It is not clear when the new rules might be implemented as the US tries to put the technology and workforce in place to handle the new system. Experts say it could take weeks or months.While there is a chance that Trump will change his mind, as he has done on tariffs with Canada and Mexico, no business can bet on which way the US might jump. More

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      Trump delays key piece of China tariff plan amid threats to other countries

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      Donald Trump halted a key part of his tariff attack on China on Friday, as he threatened to impose new US duties on goods from many more countries next week.Plans to ensure shipments from China to the US worth less than $800 still face tariffs – removing the longstanding duty-free status of low-cast packages – have been delayed to give more time to federal agencies to prepare for the change.At the White House on Friday, however, the president said he would announce new reciprocal tariffs on more countries next week. He did not give any details specifying what the tariffs will be and which countries would be affected.“I’ll be announcing that next week reciprocal trade, so that we’re treated evenly with other countries. We don’t want any more, any less,” Trump told reporters during a bilateral meeting with Japanese prime minister Shigeru Ishiba.On Tuesday, the US Postal Service briefly halted all incoming packages from China and Hong Kong after Trump ended a de minimis provision that allowed low-value packages from China to enter the US duty-free.The provision allowed Chinese e-commerce companies such as Shein and Temu to ship items into the US without having to pay tariffs Trump had enacted on China in 2018. After a 12-hour period, the US Postal Service resumed taking all packages on Wednesday.An executive order, signed by Trump, said he would keep the provision until “adequate systems are in place to fully and expediently process and collect tariff revenue”.The president had removed the duty-free provision as his overall tariff strategy against China, what he says is in response to illegal drugs that are coming in from the country. Trump placed a 10% tariff on all Chinese imports, which went into effect this week.skip past newsletter promotionafter newsletter promotionAny new tariffs will add to the confusion and chaos over global trade Trump has created since he entered office. Trump had originally planned to place 25% tariffs against Mexico and Canada on 1 February but ultimately halted both tariffs after negotiations with the country leaders. Those tariffs are now expected to go into effect 1 March.Reuters contributed reporting More

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      Trump’s tariff threat sets stage for bitter global trade war

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      Donald Trump’s threat to impose steep tariffs on goods imported into the US has set the stage for a bitter global trade war, according to trade experts and economists, with consumers and companies warned to brace for steep costs.The president-elect announced on Monday night that he intended to hit Canada, Mexico and China with tariffs on all their exports to the US – until they reduce migration and the flow of drugs into the country.As officials in the three countries scrambled to respond, Keith Rockwell, a former director at the World Trade Organization, predicted that Trump’s move could spark a trade war. “The United States exports hundreds of billions of dollars worth of goods to these countries,” he said. “Anyone who expects that they will stand pat and not retaliate has not been paying attention.”China promptly suggested that both sides would lose from an escalation in economic tensions. “No one will win a trade war or a tariff war,” Liu Pengyu, a spokesperson at the Chinese embassy in Washington, wrote on X, formerly Twitter. Chrystia Freeland, Canada’s deputy prime minister, and Dominic LeBlanc, its public safety minister, touted the country’s “balanced and mutually beneficial” economic ties with the US.Hours after Trump issued the announcements on Truth Social, his social media platform, economists at ING released research that estimated his broader campaign proposals on trade – including a universal tariff of between 10% and 20% on all goods imported from overseas, and a 60% tariff on all goods from China – could cost each US consumer up to $2,400 each year.“This potential increase in consumer costs and inflation could have widespread economic implications, particularly in an economy where consumer spending accounts for 70% of all activity,” James Knightley of ING said.It is unclear whether Trump, who has described “tariff” as “the most beautiful word in the dictionary”, will follow through on this plan. Tariffs – levies paid for by the company importing foreign goods – are not popular with voters, even Trump’s voters. A Harris poll conducted for the Guardian found 69% of people believe they will increase the prices they pay.And while he threatened universal tariffs while campaigning for the White House, this proposal – a 25% duty on all goods from Mexico and Canada, and a 10% duty on China, on top of existing duties – is more targeted.“Trump’s statements clearly herald the dawn of a new era of US trade protectionism that will sweep many US trading partners into its ambit,” said Eswar Prasad, former head of the IMF’s China division. “Such tariffs will have a disruptive effect on US as well as international trade, as countries around the world jockey to soften the blow of US tariffs on their own economies and try to find ways to evade the tariffs.”On the campaign trail, Trump and his allies claimed such measures would help strengthen the US economy and “make America wealthy again”. Many economists took a different view, warning that sweeping tariffs would increase the price of goods for US consumers, and risk prompting other nations to retaliate, hitting US businesses exporting goods to the world.But in his announcements on Tuesday, Trump did not focus on the economic benefits has claimed tariffs would bring. Instead, he blamed Mexico and Canada for “ridiculous Open Borders” he alleged were prompting an immigration crisis, and China for “the massive amounts of drugs, in particular Fentanyl” arriving in the US – and pledged to impose tariffs on these countries until they addressed his concerns.“Trump apparently sees tariffs as a tool with broad uses in tackling a variety of malign external factors that have adverse effects on the US economy, society and national security,” noted Prasad, now a professor of trade policy at Cornell University.skip past newsletter promotionafter newsletter promotionThe billionaire hedge fund manager Bill Ackman, who endorsed Trump, wrote on X that the president-elect “is going to use tariffs as a weapon to achieve economic and political outcomes which are in the best interest of America”, in a bid to deliver on his “America First” policy strategy.Making such announcements on social media “is a great way for Trump to effect foreign policy changes even before he takes office”, Ackman claimed.As Trump builds out his broader trade strategy, Rockwell, formerly of the WTO, said a 10% universal tariff would me “more manageable” than 20%. “But if you raise it 20%, that creates a different dynamic,” he said. “You’re going to see much, much less demand for these products coming in.“There will also be, without any doubt, retaliation,” he added. European officials “have got their list drawn up”, he said. “It’s the most closely guarded secret in Brussels, but it’s drawn up.”Countries will hit back with tariffs on “political pinch points”, Rockwell predicted. Under the last Trump administration, the European Union targeted US exports including Harley-Davidson bikes, Levi’s jeans and Kentucky bourbon. More

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      Tariffs, tech and Taiwan: how China hopes to Trump-proof its economy

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      China is bracing itself for four years of volatile relations with its biggest trading partner and geopolitical rival, as the dust settles on the news that Donald Trump will once again be in the White House.On Thursday China’s president, Xi Jinping, congratulated Trump on his victory and said that the two countries must “get along with each other in the new era”, according to a Chinese government readout.“A stable, healthy and sustainable China-US relationship is in the common interest of both countries and is in line with the expectations of the international community,” Xi said.But the reality is that Trump’s second presidency, which will begin as China grapples with a difficult economic situation and an entrenched, bipartisan hawkishness in Washington, will be a challenge for Beijing.“Trump 2.0 is likely to be more destructive than the 2017 version,” said Wang Dong, a professor of international relations at Peking University, in a pre-election interview with Chinese media.“Compared with his first term in office in 2017, Trump’s views in his second campaign in 2024 have not changed much, but the domestic situation and international environment have changed dramatically … during the Trump 2.0 period, China and the United States are likely to have constant friction and conflict”.The trade war ‘will be worse’Analysts have said Trump’s approach to China will be hard to predict. During his last presidency he swung from praising Xi as a great leader and friend, to presiding over a raft of hawkish policies and waging a trade war that pitted the world’s two biggest economies against each other.Xi, now presiding over a far worse domestic economy, is likely hoping to avoid a repeat of the trade war, but may be out of luck. During the campaign, Trump promised to impose tariffs of 60% on all Chinese imports, which could affect $500bn worth of goods, asset managers PineBridge Investments suggested to Reuters.View image in fullscreenYu Jie, a senior research fellow at Chatham House, said that policymakers in Beijing have been preparing for a Trump victory for months. The trade war “will be worse than the first term of Trump,” Yu said. So the Chinese government is trying to lessen its exposure to the US ahead of time.One approach has been to increase China’s trade volumes with global south countries. In September, at the Forum on China-Africa Cooperation summit in Beijing, Xi announced that China would introduce a regime of zero tariffs for developing countries that have diplomatic relations with Beijing, including 33 in Africa. Such policies stand in stark contrast to the economic barriers between China and the US.And amid restrictions from the US and its allies on China’s ability to purchase the most advanced technology for making semiconductors, Chinese firms have become focused on building their own alternatives.The Ministry of Industry and Information Technology recently revealed that it had built a lithography scanner capable of producing chips as small as 65 nanometers. That is still well behind the most cutting-edge technology made by ASML, the Dutch company that has been blocked from selling certain equipment to China because of a Dutch government agreement with the US, but it is still an improvement on where China’s capabilities were even two years ago.‘A poisoned chalice’When it comes to geopolitics, Trump’s unorthodox approach may be an opportunity for Beijing, some analysts noted. With Trump in the White House, “there will be no violence in Taiwan,” said Shen Dingli, a senior international relations scholar in Shanghai. “He will make a deal”.Whether or not any such deal would be acceptable to either Beijing or Taipei is another matter. Trump’s position on Taiwan, which China regards as part of its territory, has been very unclear. During his first presidential term the US increased arms sales to Taiwan and lifted restrictions on contacts between US and Taiwanese officials.However earlier this year Trump called into question the US’s continued support of Taiwan, accusing it of stealing American semiconductor industry, and suggesting Taiwan should pay for US protection.But in an interview last month, Trump said that that he wouldn’t have to use military force to prevent a blockade on Taiwan – one mooted option for a possible Chinese attempt at annexing it – because Xi “respects me and he knows I’m f— crazy”, he was quoted as saying.View image in fullscreenHe promised tariffs of 150-200% if China tried a blockade. But that too raises complications. There are reportedly hundreds of Taiwanese businesses in China, who would all be vulnerable to China-targeted tariffs. On Thursday, Taipei said it would help Taiwanese businesses to relocate production from China, ahead of Trump tariffs. Economy minister JW Kuo said the impact on the businesses otherwise would be “quite large”.Drew Thompson, senior fellow at the S. Rajaratnam school of international studies says Trump would be unlikely to use Taiwan as a bargaining chip in any “deal” with Xi. If only because Xi is unlikely to accept it as one.“The trade itself is a poisoned chalice for Xi because he is conceding [Taiwan] is not already part of China and he needs to trade for it.”Alexander Huang, an associate professor at Tamkang University, told a panel in Taipei on Thursday that while Trump’s behaviour may be unpredictable, his logic was not. “He does not want the US to be taken advantage of,” Huang said, suggesting that if Trump were to commit US forces to defend Taiwan against China, it would be purely to protect US interests.One of the major sticking points in China’s relationship with the west in recent years has been its continued economic and political support for Russia during the invasion of Ukraine. Xi presents himself as a global statesman who can help to broker peace, but western analysts say that China’s deepening economic and political ties have prolonged rather than resolved the crisis.Trump has claimed that he could end the war “in 24 hours”. But many US allies fear the more likely outcome is that Trump reduces the flow of military aid to Ukraine, or pressures Kyiv to accept a deal in which it loses control of some territory to Russia.“If Trump’s support to Ukraine reduces, that gives China a chance to jump to the negotiating table,” Yu said. Along with the ongoing war in Gaza, “Beijing will exploit the line that the US is the single most destructive force in the world, while Beijing brings stability”. More

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      How will the outcome of the US election affect Australia, Aukus and our region?

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      More people have gone to a ballot box in 2024 than in any other year in human history. Billions have cast votes across scores of countries, including some of the largest, most powerful democracies on Earth.But America’s remains the world’s global election, the most forensically examined, the most consequential all over the world. America matters.“The US is still the most powerful actor in the international system,” Dr Michael Fullilove, executive director of the Lowy Institute, told the Guardian this week. “It is the richest company, with the biggest military, the biggest economy.“It is the only country that runs a truly global foreign policy, the only country that can project power anywhere on Earth.“It is the democratic, meritocratic superpower … it still attracts so many people around the world … the whole world is remarkably well-informed about the US election.”And Australia’s future is bound up in America’s electoral decision. As one of America’s closest allies – supporters might argue for “staunchest”, opponents might claim “uncritical” – Australia’s economic, security and multilateral landscape is tied to that of the US and the occupant of 1600 Pennsylvania Avenue.How could the election of a second Donald Trump presidency impact Australia? Or how might the quasi-continuity of Vice-President Kamala Harris ascending to the White House?Trump, neccesarily, is the object of much of Australia’s focus. Harris, as Joe Biden’s vice-president, is the continuity candidate – promoting policy positions in line with the current administration – meaning a Trump victory would raise many more questions.The election too, will be keenly fought over a host of domestic issues which have no direct – though some peripheral – impact on Australia. This includes issues such as reproductive rights (the overturning of Roe v Wade by the supreme court and a mooted national abortion ban), migration (particularly on the country’s southern border), gun control and law and order – issues excluded in this piece.Watching the crescendo of an increasingly vituperative election campaign, Fullilove said that politically “America is running a high temperature at the moment”.“My real hope for the election is that there is a clear result, that the loser accepts defeat, that the transfer of power is peaceful – that might sound like a low bar – but it is critical, for America and for the world.”Values and democracyResponding to the unpredictability of Trump’s first presidency, Australian politicians repeated the refrain that the Australian-US alliance runs deeper than a president or prime minister and that it is one founded on shared values and democratic principles.Trump has said he would not be a dictator, “except on day one”. He said he would seek retribution on his political opponents: “root out the communists, Marxists, fascists and the radical left thugs that live like vermin within the confines of our country that lie and steal and cheat on elections”.As commander-in-chief, he said he would consider using the military to attack domestic enemies: “It should be very easily handled by, if necessary, by the national guard, or if really necessary, by the military”.Trump’s former chief of staff, Gen John Kelly, said this week Trump was a “fascist” who “certainly prefers the dictator approach to government”. Trump has repeatedly lied that he won the 2020 election and mused on “terminating” the constitution.He told a rally in July that if he was elected president again, “you won’t have to vote any more”.“In four years, you don’t have to vote again. We’ll have it fixed so good, you’re not going have to vote.”Harris has denounced Trump as a “fascist” who wants “unchecked power” and a military personally loyal to him.In her speech to the Democratic National Convention, she cited the supreme court’s split decision in July stating Trump enjoyed broad immunity for official acts taken while in office.“Consider the power he [Trump] will have, especially after the United States supreme court ruled he will be immune from prosecution,” she said. “Imagine Donald Trump with no guardrails.”ClimateClimate change is “one of the greatest scams of all time”, Trump said last month. “We will drill, baby, drill,” he told the Republican National Convention when accepting the party’s nomination. “We will do it at levels that nobody’s ever seen before.”He has said he would prohibit, by executive order, all offshore wind projects on the first day of his presidency, saying they kill whales.In his first term, Trump withdrew from the Paris agreement (the US rejoined under Biden). But his campaign has indicated a second Trump presidency might re-abandon the Paris agreement, as well as the United Nations Framework Convention on Climate Change (UNFCCC) which underpins it. 198 countries have committed to the UNFCCC: none has left it.The withdrawal of the US – the world’s second-largest greenhouse gas emitter and the country that has contributed the largest share of historical emissions – would increase political uncertainty around the transition to net zero and deter investment. It would weaken the influence of the so-called umbrella group – of which Australia is a member – and give succour to climate laggards, such as the petrostates, to further slow global reduction efforts.Some have argued that much of the impetus and funding for global emissions reductions is locked in and emissions reductions efforts are working on timescales far longer than a four-year presidential cycle.But Michael Mann, distinguished professor of meteorology at Pennsylvania State University, has argued “a second Trump term is game over for the climate”.Harris has called climate change an “existential threat”. As attorney general in California, she prosecuted oil companies for breaches of environmental laws. As vice-president, she was the tie-breaking vote in the Senate to pass the Inflation Reduction Act, which provided about US$370bn to reduce greenhouse gas emissions to 40% below 2005 levels by 2030.But during Harris’s vice-presidency, the US produced and exported the most crude oil of any country at any time in history, according to the US Energy Information Administration’s figures. Crude oil production averaged 12.9m barrels a day in 2023, breaking the previous global record of 12.3m, set in 2019.Trade and the economyTrump is a fierce economic nationalist, hostile to free trade and intensely focused on America’s trade deficit, which he regards as a sign of weakness. He has pledged to impose a 10% tariff on all imports to the US, with a 60% tariff on all Chinese imports and a 100% tariff on Chinese cars.Economists argue the policy will lead to higher prices and lower growth. The nonpartisan Peterson Institute for International Economics estimated the proposed tariffs would lower the incomes of an average American household by US$1,700 a year: poor Americans would be more affected than the rich.In September, Trump said: “Together, we will deliver low taxes, low regulations, low energy costs, low interest rates and low inflation so that everyone can afford groceries, a car and a home”. He has promised to reduce regulation and cut taxes, but some economists argue his tax cuts would benefit America’s wealthiest while hurting the poorest.Australia is not dependent on direct trade with the US, but the majority of Australia’s trade is with China. If China’s economy, already weak, is damaged further by a trade war with America, Australia will be exposed.Harris has criticised Trump’s tariff policies, arguing they would act as a “sales tax on Americans” and lead to higher prices and inflation. But the Biden administration – of which she has been vice-president – has extended Trump-era tariffs and used tariffs to influence trade on industries it sees as strategic – particularly in relation to China. The administration extended tariffs on solar panels in 2022, and in May this year, increased tariffs on Chinese electric vehicles to 100%.As a senator, Harris opposed the Trans-Pacific Partnership, a free trade agreement (involving Australia) negotiated by President Obama and from which Trump withdrew.Defence and AukusWhile Trump has been critical of Nato, he has not criticised Australia as a military ally or the Aukus deal, a tripartite agreement (between the US, UK, and Australia) for Australia to acquire up to eight nuclear-powered submarines between now and the mid-2050s, the first in the 2030s.Australia’s deputy prime minister, Richard Marles, said his government believed Trump would honour the agreement: “Every engagement we’ve had with the Trump camp in the normal process of speaking with people on both sides of politics in America, there is support for … Aukus,” he said.

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      But John Bolton, Trump’s former national security adviser – now a fierce critic of the former president – said of Aukus: “I think it could be in jeopardy”.Fullilove asked Trump’s vice-presidential candidate JD Vance this year for his position on the agreement. Vance replied he was “a fan of Aukus”.“I suspect that Aukus would be safe under Trump too,” Fullilove told the Guardian.“Australia is an example of an ally that is contributing to deterrence and contributing to the US industrial base. You could imagine Trump threatening to unpick it, but my conclusion is it is safe.”Aukus was signed by the Biden-Harris administration. The administration’s Indo-Pacific strategy commits to the deal, but does not give a timeline: “Through the Aukus partnership, we will identify the optimal pathway to deliver nuclear-powered submarines to the Royal Australian Navy at the earliest achievable date.”skip past newsletter promotionafter newsletter promotionAirbases in Australia were used for US airstrikes on Houthi targets in Yemen this month. The defence department confirmed Australia provided support for the US strikes “through access and overflight for US aircraft in northern Australia”.Israel-GazaBoth Trump and Harris have declared their support for Israel and reiterated support for a two-state solution between Israel and Palestine.The US continues to supply Israel with billions of dollars of weapons and munitions as Israel carries out its bombardment of Gaza, Lebanon, and, this week, strikes on Iran.The US is, by far, the largest supplier of arms to Israel: 69% of Israel’s imports of major conventional arms between 2019 and 2023 came from America, according to the Stockholm International Peace Research Institute. The US has signed an agreement to provide Israel with $3.8bn in annual military aid under a 10-year-agreement.1,200 Israelis died in the 7 October 2023 attacks by Hamas. More than 42,000 people have died in Gaza since, including more than 16,000 children.Trump has expressed his support for Israel’s invasion and bombardment of Gaza. He has also urged Israel to “finish up” the war because it is losing support.“You have to finish up your war … you’ve got to get it done,” he told Israeli newspaper Israel Hayom. “We’ve got to get to peace. You can’t have this going on, and I will say Israel has to be very careful because you are losing a lot of the world. You are losing a lot of support.”Trump said of Harris: “She hates Israel. If she’s president, I believe that Israel will not exist within two years from now.”In his first term, Trump released a peace proposal he called a blueprint for a two-state solution: it would not have created an independent Palestinian state and was seen as strongly favouring Israel.“Israel has a right to defend itself,” Harris said in September’s presidential debate.She continued: “How it does so matters. Because it is also true far too many innocent Palestinians have been killed. Children. Mothers. What we know is that this war must end. It must end immediately, and the way it will end is we need a ceasefire deal and we need the hostages out.”Harris has consistently reiterated support for a two-state solution.The war in UkraineNearly three years on since Russia invaded Ukraine – and a decade since its initial assault on Crimea – the US remains the largest backer of Ukraine’s war effort. It is by far the single biggest contributor of money and materiel, outspending the next largest contributor, Germany, by five to one.Trump has made it abundantly clear he wants the war over – or, more precisely, he wants to stop paying for it.He told a rally: “I think [Ukrainian president Volodymyr] Zelenskyy is maybe the greatest salesman of any politician that’s ever lived. Every time he comes to our country he walks away with $US60bn.”Influencing Republican allies in Congress, Trump stalled the last funding package from passing for months while Ukrainian forces – critically short of ammunition and artillery – struggled to hold back Russian advances. Trump’s manoeuvring was criticised as essentially backing Vladimir Putin’s irredentism.Trump has also repeatedly claimed if re-elected he would end the war in a day – “I’ll have that done in 24 hours” – without detailing how. It is presumed a deal to stop the conflict would involve the ceding of Ukrainian territory to Russia.Trump’s disposition towards Ukraine has broader implications for the collective security principle underpinning Nato. Trump has compared Nato to a protection racket and said he would not protect “delinquent” allies.“In fact, I would encourage them [the Russians] to do whatever the hell they want. You gotta pay! You gotta pay your bills.”Trump has repeatedly upbraided European countries for failing to live up to their commitment to spend 2% of their GDP on defence.Harris has pledged to continue Biden’s support for Ukraine and for the Nato alliance. She said as vice-president “I helped mobilise a global response – over 50 countries – to defend against Putin’s aggression.“And as president, I will stand strong with Ukraine and our Nato allies.”Harris, however, has wavered on Ukraine being admitted as a member to Nato, saying the question was among the “issues that we will deal with if and when it arrives at that point”.China“Trump and Kamala Harris are two bowls of poison for Beijing. Both see China as a competitor or even an adversary,” Prof Zhao Minghao, from the Institute of International Studies at Fudan University, told the Financial Times.Trump was hawkish towards China in his first term, confronting Beijing over what he argued were a suite of unfair practices and abuses such as intellectual property theft, currency manipulation and economic espionage. He pledged to “completely eliminate dependence on China in all critical areas,” including electronics, steel, pharmaceuticals, and rare earths. And he has flagged new laws to stop US companies from investing in China and a ban on federal contracts for any company that outsources to China.His first administration rejected Chinese territorial claims in the South China Sea, condemning Beijing’s “campaign of bullying” of other countries.Harris spoke on China in September, saying her government would work to ensure the US “is leading the world in the industries of the future and making sure America, not China, wins the competition for the 21st century”.“China is not moving slowly … if we are to compete, we can’t afford to, either.”She condemned Trump as having “constantly got played by China” and said his administration shipped advanced semiconductors to China, allowing them to upgrade their military.“I will never hesitate to take swift and strong measures when China undermines the rules of the road at the expense of our workers, our communities, and our companies.”The PacificClimate change is an urgent existential threat for the islands of the Pacific. Trump does not mention the climate crisis in his platform, nor is it mentioned in Agenda47.The Heritage Foundation – the conservative thinktank behind the Trump-linked Project 2025 – has urged for partnership with the Pacific islands, but on American terms and in its interests. “The US must adopt a clear-eyed approach about putting American interests and objectives in the Pacific islands first,” it said.The Biden-Harris administration have held two Pacific islands-US summits which have been big on ambition – with commitments of more than $1bn to resilience regionalism and sustainable development – but seen as lacking, so far, in application and results.The 2022 US-Pacific partnership declared a shared vision for “a resilient Pacific region of peace, harmony, security, social inclusion, and prosperity”.Fullilove said while Harris sits within the mainstream traditions of US foreign policy over recent decades, “it’s hard to get a really accurate fix on what she thinks about the world”.“At a broad level, she believes in American leadership, she believes in alliances, she prefers democracy to dictators, she more pro-trade than Trump. But beyond that, it’s very hard to know how she will approach Asia, the part of the world Australia is in, because she hasn’t been a prominent foreign policy voice in the Biden administration.”Read more about the 2024 US presidential election:

      Presidential poll tracker

      Harris and Trump policies

      What to know about early voting More