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      After America: can Europe learn to go it alone without the US?

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      The German ­electronics firm Hensoldt has a backlog of orders for its technology, ­including radars that protect Ukraine from Russian airstrikes. Meanwhile, Germany’s car industry is struggling with low European demand and competition from China.As Europe worries about how it can weather the economic and ­political turmoil unleashed by Donald Trump, executives from Munich and Düsseldorf say they have at least a partial answer.In January, Hensoldt offered to take on workers laid off by the car parts suppliers Bosch and Continental. The defence giant Rheinmetall made a similar ­proposal last year, and in February announced it would repurpose two automotive component factories.It was a pivot that offered hope amid America’s rapid ­dismantling of the postwar global order – ­protecting jobs and Germany’s industrial base as access to US ­markets shrinks, while ramping up Europe’s capacity to protect itself.As politicians around the world try to work out how best to ­protect their countries from Trump’s ­capricious policymaking, the one constant in all their calculations for the future is a diminished American role in their countries. Trump has mooted plans for a 25% tariff on EU goods, including cars, and has already put duties at that level on steel and aluminium from the bloc.In February, his vice-president, JD Vance, launched a blistering attack on European democracy in Munich, questioning whether it was worth defending.In his first term, Trump touted decoupling from China as a way to bolster US jobs and the economy against a rapacious rival. Now, in his second term, he is pursuing a much broader decoupling from the ­country’s historical allies – a shift that few had anticipated or were prepared to face.The new US administration is sealing off its markets, retreating from America’s global security role, and cutting soft-power projects that aimed to shape the world through research, aid and culture.The only form of greater American presence beyond the country’s ­current borders that seems to ­interest Trump is ­territorial ­expansion – ­encouraging, ­perhaps, for a dictator such as Vladimir Putin as he wages an ­imperial war in Ukraine, but ­unwelcome and ­alarming elsewhere.“The idea of the US ­abandoning western Europe was ­unimaginable even a decade ago, because its role there also secures broader American influence in the world,” said Phillip Ayoub, a professor of international relations at University College London.“There is a comparative ­advantage to strong alliances because they make you richer in trade and safer because they deter other powers.”Trump’s vision of the world rejects that view, casting his ­country as a naively magnanimous ­superpower that has for decades funded and policed the world while getting little more than debt and ingratitude for its troubles.View image in fullscreenYet if postwar American ­presidents did not pursue the ­territorial empire that Trump now dreams of, they wielded an ­imperial power not reflected on maps. Decisions made in Washington DC reshaped countries from Chile to Iraq without the participation or consent of their populations.And the global order he is ­tearing down made the country so rich and powerful that for a brief, heady moment around the turn of the ­millennium, the US elite embraced the idea that history was over, and that human society had reached its peak and permanent form in the ­liberal democracy embodied in their constitution.The details of the new American relationship with the world are still being worked out day by day in court battles at home and trade and diplomatic negotiations abroad, but the impact of Trump’s presidency will last long into the future.“An election could change ­policy in Washington DC. But the new ­reality is that from government to government you could have a ­different attitude to the US’s place in the world,” Ayoub said. “This retreat will be factored into policymaking everywhere now.”For now, the ­immediate priority in most ­countries is limiting the extent of tariffs and the impact of US cuts, in areas ranging from aid to defence.Geography and the impact of ­previous free trade deals have ­combined to make neighbours of the US extremely vulnerable to its tariffs. Exports to the US account for a quarter of Mexico’s GDP. In Canada, where all other potential trading partners are an ocean or half a continent away, they are about a fifth of GDP.European countries may be less immediately vulnerable to a trade squeeze, with exports to the US accounting for less than 3% of the European Union’s GDP.But budgets from London to Warsaw are also strained by the need to ramp up defence ­spending to make up for the US retreat, both from immediate support for the Ukrainian forces battling Russia, and from the longer-term backing of European defence. Even ­optimistic assessments suggest it will take the best part of a decade before the continent’s own defence ­capacity can match the protection currently offered by the US, excluding its nuclear deterrent.The pain of breaking up or reshaping major relationships does not only fall on one party – ­something even Trump has ­admitted. The cost of some tariffs will be passed on to US ­consumers, and American businesses may lose customers.One early high-profile casualty could be Lockheed Martin, which produces F-35 jet fighters. Contracts allowing the US to restrict how the planes are used by allies caused little debate during friendlier times. Now, in Berlin and other capitals, defence ministers are worrying about a ­possible “kill switch” and hesitating over major new orders.Longer term, Trump could also fuel a ­cultural “decoupling”, with attacks on the arts and academia ­driving highly talented ­individuals to flee the US or avoid it.Several artists have cancelled tours, and the concert pianist András Schiff last week said last week he would no longer work in the US because of Trump. He had already boycotted Russia.Academics at elite British ­universities say they have seen a surge in job applications from US-based colleagues, many ­willing to lose tenure and take a ­considerable pay cut in order to move across the Atlantic. A French university that offered ­“sanctuary” to US researchers said it had received 40 applications, and one academic moved this month.As with the economy, the US’s ­cultural standing is not under direct threat. American music – much of it made by ­people who publicly oppose Trump – will be consumed worldwide. The Oscars are likely to remain the most ­coveted prize for cinema, the Emmys for ­television, the Pulitzers for ­journalism. Yet an exodus would still be ­damaging in a country where research and the creative arts are key drivers of growth, and benefit the places they settle instead – the long-term US allies that Trump sees as threats.The US president has promised voters that where his economic policies cause pain it will be short-term, and pave the way for long term prosperity in America.To critics, they look like a ­template for a poorer, more ­dangerous and fragmented world, where any limited benefits of ­decoupling are as likely to be reaped by a British university or a German defence firm as by Americans.View image in fullscreenCultureThe hit to America’s creative ­sector, from budget freezes and threats to the federal bodies and national schemes that fund ­museums, ­galleries, theatres and libraries, is set to take a toll on its income from tourism – and send visitors to Britain and Europe instead.In response to the second Trump presidency, some international ­artists are already pulling out of ­appearances in American venues, or at music festivals, and the likely knock-on effect is a reduction in ­visits from abroad.Last week, the Canadian singer/songwriter Leslie Hudson cancelled her American tour, saying on social media: “Like a lot of Canadians, and so many others, I no longer feel safe to enter the country.” The German violinist Christian Tetzlaff cancelled a spring tour in protest at the new administration’s policies, with particular reference to Ukraine.In Pittsburgh, Pennsylvania, the managing director of City theatre, James McNeel, has ­spoken of a growing funding threat. “What we need more than anything is stability,” he says.Prior to the pandemic, the US Travel Association ­valued the total spending of the near-80 million tourists who came into the US at about $2 trillion (£1.5tn).This was supported by federal investment in ­infrastructure and the ­airline industry, but travel experts also traced back much of this tourism success to the diverse image of many of its cities. Art tourism was a big part of this, with art fans who ­travelled to North America in 2023 ­accounting for more than a ­quarter of the global total. Cities such as New York, Los Angeles, and Chicago boast ­celebrated museums and ­galleries, and the rise of immersive art and public installations has broadened this appeal. The attraction of art fairs such as Art Basel Miami has also grown internationally. In 2023, it was reportedly visited by more than 79,000 people.But Trump has made rapid and determined cuts to all museum ­projects tied to diversity, equity and inclusion (DEI) initiatives, ­affecting the Smithsonian Institution, which has closed its DEI office. The National Gallery of Art also closed its office of belonging and inclusion, while exhibitions across the ­country have been cancelled. The biggest impact may well be on cultural ­tourism associated with LGBTQ+ communities and climate activism.Trump at one point intended for 2026 to be a bumper year for American tourism, with a ­“special one-time festival” planned for “­millions of people from around the world” at the Iowa State Fairground to mark 250 years since ­independence.The level of ­international advance booking will be watched.Likewise, a new status for London, Berlin and Paris as “refuge cities” for American artists is being predicted.British and European ­institutions might also soon have to make room for American artwork. The Washington Post has reported that large collections of public art have been left without professional ­security or conservationists.View image in fullscreenEconomicsShould the UK government decide to untangle the economy’s many ties with the US, it would need to tread carefully. America is the single ­largest market for Britain’s exports, ranging from the most sophisticated components in US navy submarines to artisan scented candles.Official figures show total trade in goods and services – exports plus imports – between Britain and the US was £294bn in the year to 30 September, 2024. The stock of investment by US companies in the UK stood at £708bn in 2023, or 34% of total of foreign direct investment.Jonathan Reynolds, the business secretary, is hoping to sign a limited trade deal with his counterparts in Washington that covers digital services and commits both countries to secure supply chains for vital goods.But a deal with any scope or ­judicial oversight will need Congress to agree, and that is far from certain to happen.UK manufacturers could begin to wean themselves off US raw ­materials and components, but the presumption must be that they traded with the Americans in the first place because they provided the best products. Exports could be directed back at the EU, though without rejoining the single ­market and customs union, the benefit would be limited.It would be a harder job switching services exports away from the US. The common language may often divide the two nations, but in ­practice the sector is a huge boon.In Brussels, officials believe any kind of trade deal with the US is off the agenda.As Donald Trump is only too well aware, the EU has a large trade ­surplus with America. In 2014 the surplus was about €100bn. By last year the gap had grown to almost €200bn. For this reason, the EU has already adopted a more ­confrontational stance.The British Chambers of Commerce says almost two-thirds of factory owners that export to the US are worried. European ­manufacturers have revealed similar concerns in recent surveys.Some are comforted by figures showing the US has a trade surplus in goods with the UK and how, in practice, trade and investment relationships exist well away from the White House and remain robust.However, businesses thought the same about Brussels after the vote to leave the EU. It didn’t happen and a breakdown in relations ensued.That said, rekindling relations with the EU can be part of the answer. Reset talks are under way and there is a leaders’ summit on 19 May that should address at least some trade barriers. The UK might find that food exports become easier and it gains access to a wider range of raw ­materials and ­components by rejoining the Pan-Euro-Mediterranean convention.Still, the US will remain a major trading partner and upsetting the Trump White House could have huge consequences.View image in fullscreenDefenceDonald Trump’s abandonment of Europe’s defence and disdain for Nato marks one of the most ­profound and influential breaks with longstanding US policy, even for a supremely disruptive leader.Many US presidents have grumbled about European over-reliance on American deterrence in recent decades, with predecessors including Barack Obama demanding allies spend more on their own armies.But their frustrations were rooted in concern that European defence cuts undermined an ­alliance that almost everyone in Washington – across the political divide – saw as critical to American global leadership.Trump, in contrast, appears to be seeking European spending to replace or supersede Nato, not strengthen it. He says Washington’s defence priorities are now deterring China in Asia and fighting organised crime at home.In his first term, he touted the idea of withdrawing America from the alliance, which was formed in 1949 for protection against the Soviet Union. This time he has opted to undermine it from within.The president himself has ­publicly contemplated ignoring Article 5, the core mutual defence clause at the heart of the transatlantic ­alliance, which requires Nato ­countries to come to the aid of any member that is attacked. It has only been invoked once – by the US after the 11 September attacks on Washington and New York in 2001.Trump said the US might ­condition any support for other members on military spending, and questioned if US allies would come to the country’s aid if in need. His administration is considering giving up the Nato command role inaugurated by war hero president Dwight D Eisenhower and held by America ever since, NBC reported last week.Europe was already scrambling to increase defence spending and ­coordination when the US halted military aid shipments to Ukraine, and intelligence-sharing with Kyiv earlier this month.Trump’s decision came after a spectacular on-camera showdown in the Oval Office with Ukraine’s president, Volodymyr Zelenskyy. But his willingness to cut loose a force that Washington has trained, armed and backed, and which is fighting a major US rival, stunned even some of his own political allies.European governments who have also spent billions on Ukraine’s defence, and have been dealing with covert Russian sabotage and spy operations across the continent, were not informed in advance.The flow of weapons and aid has now resumed, but the message was clear. Major European military powers, including the UK and Germany, are now reportedly racing to put together a five- to 10-year plan for a managed transfer of European defence, to stave off any more abrupt moves from Washington.Trump’s unpredictability has been heightened by his choice of ­leaders for key security roles, ­including a former Fox television host, Pete Hegseth, as defence secretary, and Tulsi Gabbard, who has a long ­history of pro-Russian views, as director of national intelligence.Security experts warn that ­turmoil in the leadership and ­management of intelligence agencies may also lead to a less visible but highly ­damaging defence decoupling – of the relationship between America’s spies and the secret services of its allies.View image in fullscreenDiplomacyThe votes in the United Nations marking the third anniversary of Russia’s invasion of Ukraine ­provided a bleak snapshot of the yawning diplomatic divide between Donald Trump’s America and the country’s traditional allies.On February 25, the US joined international pariahs Russia, Belarus and North Korea to vote against a resolution condemning Russia as an aggressor state and calling on it to remove its troops from Ukraine.The wording rejected by Trump’s diplomats had been put forward by Ukraine, whose defence the US has funded, and the European Union, Washington’s partner in that effort. It passed in the general assembly with backing from 93 countries.The isolationist bent of Trump’s politics extends beyond the ­economy and defence, into international diplomacy. He has ordered the US to withdraw from a host of global organisations and initiatives, from the World Health Organization to the Paris climate agreement.The process of taking the world’s second biggest emitter of planet-heating pollution out of the accord to tackle global ­emissions will take about a year. As with the UN vote on Ukraine, that move puts the world’s most ­powerful democracy in unusual ­company, with Iran, Libya and Yemen as the only countries outside the deal.Trump imposed sanctions on officials at the International Criminal Court over arrest warrants it had issued for the Israeli prime minister Benjamin Netanyahu and Yoav Gallant, who was the country’s defence minister at the time.His predecessor Joe Biden had also criticised the court, but such a direct attack on an institution ­established with broad international support was unprecedented.Several former British ambassadors to Washington warned this month that there has been a seismic and perhaps permanent shift in the so-called “special relationship” between the two countries, meaning that the UK will need to seek out other allies.“It’s difficult to find either a conceptual area in ­international relations or a particular geographical area where our interests are really converging at the moment,” Nigel Sheinwald, the ­ambassador from 2007 to 2012, told a ­parliamentary committee.“On more or less any big ­foreign policy issue that we’re dealing with today, we don’t agree with the United States… whether that is the Middle East, whether it’s Iran, whether it’s climate change, China, but above all on Europe itself,” Sheinwald said. 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      Gold has surged amid economic uncertainty. Should you buy some?

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      As economic uncertainty roils the US, the price of gold has roared to record highs amid investors seeking a place to shield their cash from Donald Trump’s scattergun trade wars.A single ounce of gold cost $3,051.99 on Wednesday, compared with $2,160 in 2024, and gold has historically been seen as the safest place to invest in financially turbulent times.But the buying, and potentially hoarding, of gold need not be restricted to the Scrooge McDucks of this world. In 2025, gold can be bought from Walmart and Amazon – although experts say more established gold dealers are a better source.Once a person has bought the gold, they can do whatever they like with it: there are whole Reddit threads devoted to the best way to bury gold underground. (Dig a deep hole, dump your vacuum-sealed gold in the hole, put a layer of rocks on top of the gold so it can’t be discovered by a thief with a metal detector, then try not to forget where the gold is buried.)Experts suggest not burying the gold, however.“Gold is one of the few elements on the periodic table that does not decay or oxidize over time, so there’s no need to worry about deterioration,” said Alex Deluce, the host of the Gold Telegraph Show, and an expert in gold investment.“However, for safekeeping, store it in a secure location, ideally in a safety deposit box or a well-protected home safe. Keep it away from direct sunlight and heat sources to maintain its condition and security.”Deluce said gold should be purchased “from reputable suppliers who insure all deliveries”, and financial magazines including Forbes have lists devoted to gold-selling companies.To the uninitiated, an equally important question is: what kind of gold should people buy?Taylor Kenney, an economic journalist who works for ITM Trading, a gold and silver dealer based in Arizona, said most gold purchases are of bullion: gold that has been refined and shaped into coins or bars.Some of those bars are the big heavy type that is frequently stolen from banks in heist movies, but those tend to be very heavy, which means they are very expensive. Instead, many gold purchasers will be buying much smaller bars.A handy example was seen in the recent case of Bob Menendez, the now former Democratic senator who in January was sentenced to 11 years in prison for receiving bribes.Photos shared by the FBI showed that Menendez had an amazing a hoard of gold bullion in a variety of sizes: he had a couple of gold bars that weighed just one ounce.According to the United States Gold Bureau – which is not a government body, but instead a cleverly named private gold-trading company – the one-ounce bars are the most commonly traded around the world. Roughly the size of a US military dog tag, one-ounce bars were listed at Walmart for $3,122.10 on Friday, although anyone who has ever ordered and never received a table lamp from Walmart might want to try elsewhere.Menendez had also accumulated, through nefarious means, some one-kilo gold bars, each of which, at today’s prices, is worth just under $100,000.“Now is the perfect time to buy gold,” said Kenney.She said gold prices are rising “in response to inflation, geopolitical unrest and economic uncertainty”.Kenney added: “As dollar dominance is called into question, gold carries no counterparty risk and serves as a true store of wealth, unlike fiat currencies [such as the US dollar] that can be printed at will. The same reason central banks are buying gold is the same reason that average citizens should be buying gold as well.”Gina Miller, the founder of Moneyshe.com, is less convinced. She told CityAM that while gold has traditionally been viewed as a safe investment, “its track record reveals significant limitations as a long-term investment”.“For instance, while gold surged 148% from October 2008 to August 2011, it took nearly nine years, until July 2020, to reach new highs. Such prolonged stagnation makes it unappealing for investors seeking steady, long-term growth,” Miller said.With gold at record-high prices, it is unlikely that people will be able to buy the metal and flip it for quick returns. Instead, experts say, people should see gold as a small part of an investment portfolio, rather than pumping all their money into it and putting it in a big vault.As Trump shows no signs of backing down on his trade battles, having a few dog tags of gold stored in a safe space, or, if you’re Menendez, “jammed into jackets and boots”, might not be the worst option. More

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      Is Trump driving the US into a recession? – in charts

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      Prospects for the US economy have cooled significantly in a matter of months. After outperforming its international peers last year, warning lights are flashing on a dashboard of economic indicators as analysts warn that Donald Trump’s erratic approach is hitting the world’s largest economy.Fears of a US recession this year are growing, in what is being called a “Trumpcession”, amid a sharp decline in business and consumer confidence as the president threatens punitive import tariffs on US allies and enemies alike.Most economists reckon a recession – defined as two consecutive quarters of shrinking economic output – can be avoided. But it is clear there are storm clouds gathering within the president’s first 100 days back in the White House.GDPUS growth in gross domestic product (GDP) had outpaced international peers in recent years, and since the Covid pandemic in particular – helped by the Biden administration pumping billions of dollars into the economy through the Inflation Reduction Act. The former president did not get much credit, though, as voters felt the squeeze from the period of high inflation triggered by the pandemic and Russia’s war in Ukraine.This week, the Atlanta Federal Reserve’s GDPNow, which measures GDP economic growth in real time, suggested the US economy would contract at an annual rate of 2% in the first quarter. However, this widely followed indicator can be volatile, and it is heavily influenced by the US trade deficit, which soared in January.Trade balanceThe US goods trade gap surged to $153.3bn in January. This was driven by record import volumes, an increase of $36.2bn to $329.5bn in total, as US businesses rushed to bring shipments into the country to avoid potential tariffs.US gold importsA significant driver of the import rise was inbound shipments of “finished metal shapes”, which include bars of gold. The trend is also attributed to traders rushing to get ahead of potential US tariffs. A widening trade deficit would normally weigh on a country’s GDP, because imports are subtracted from the measurement. But because gold bought to sit in a vault is not consumed or used in production, it is excluded.This means the Atlanta Fed is likely to be overestimating the hit to first-quarter GDP. Still, there are other signs that the US economy is cooling.InflationTrump had promised to “bring prices down, starting on day one” and “cut energy costs in half within 12 months after taking office”.Official figures show the headline annual rate as measured by the consumer price index was 2.8% in February, after an unexpected rise to 3% in January from 2.9% in December. Energy costs are down by 0.2% on an annual basis.The Organisation for Economic Co-operation and Development (OECD) said on Monday that Trump’s trade wars risked stoking inflation. It increased its US inflation forecast for 2025 to 2.8%, up from a previous estimate of 2.1% made in December.EmploymentThe US jobs market has boomed in recent years, and the unemployment rate dropped to 3.5% in early 2023, the lowest level since the year of the first moon landing in 1969. The rate has ticked higher in recent months, but remains historically low at 4.1%. This has been spurred by rapid growth in the numbers of jobs being added to the economy.Wage growth has also strengthened, and has remained above inflation since early 2023, helping households to rebuild some of their purchasing power lost during the recent rise in living costs.StocksThe US stock market has powered to record highs in recent years. Tech stocks and the “magnificent seven” – Alphabet, Amazon, Apple, Microsoft, Meta, Nvidia and Tesla – have led the charge in particular, buoyed up by investors betting on the growth of artificial intelligence.The Biden administration oversaw a strong stock market performance, helped by the economic recovery from the pandemic. However, Wall Street surged after Trump’s election victory in November, amid investor expectations for tax cuts that could increase company profits. Markets have been rattled in Trump’s first 100 days amid concerns over his erratic approach to the economy and the threat of tariffs hitting growth and stoking inflation.The US dollarThe US dollar had been rising sharply against other leading currencies, reflecting the strength of the economy and investor concerns that Trump’s policies could stoke inflation. Tariffs pushing up the price of imported goods, driving up inflation, could force the US Federal Reserve to hold back from cutting interest rates.With inflation having fallen back, the Fed cut its benchmark rate last year by a whole percentage point – from a range between 5.25% and 5% to between 4.25% and 4.5%. Higher inflation could limit its capacity for further rate cuts.A dramatically slowing economy could force the central bank to take action to lower borrowing costs. This has led to a pullback in the dollar in recent weeks.Washington has long held a “strong dollar” policy in the view that it supports the purchasing power of US consumers, helping to keep inflation low. The dollar is also used as the currency of choice for world trade and underpins the financial system. The US Treasury secretary, Scott Bessent, has said this approach is not changing. But Trump has argued that a weaker dollar would benefit US manufacturing by making exports cheaper for overseas buyers.Prices of inputs for manufactured productsBusiness surveys have shown a marked increase in input costs for US manufacturers, providing an early warning sign for growth and inflation. The price gauge on the Institute for Supply Management (ISM) manufacturing purchasing managers’ index (PMI) shows raw material costs rose sharply at the start of this year, in the first signs of supplier difficulties and discussions about who will pay for tariffs. The rise in input costs could dent US manufacturing output, and is likely to be passed on to consumers in the form of higher prices for finished goods.Consumer spendingUS consumer spending unexpectedly dropped in January for the first time in almost two years, with a fall of 0.2%, the biggest decrease in nearly four years. Cold temperatures in some parts of the country, as well as wildfires in California, were likely to have hit spending. However, some analysts warn consumer sentiment has taken a knock amid mounting concern over the strength of the economy. More

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      Notable Tesla investor says he hopes Musk’s government role is ‘short-lived’

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      A devoted investor in Elon Musk’s Tesla – and once a close childhood friend of the US president’s eldest son and namesake – says he hopes the world’s richest man’s role in cutting federal spending for Donald Trump’s administration is “short-lived” and that he returns to managing his businesses.Investment manager Christopher Tsai, whose firm has tens of millions of dollars tied up in Tesla, said the stock market had demonstrated clear signs of displeasure with Musk’s activities at the so-called department of government efficiency. And, in an interview with the Guardian, Tsai said: “I hope his involvement with [Doge] is short-lived so he can spend even more time on his businesses.”The chief investment officer and president of Tsai Capital, which reportedly manages a portfolio of about $137m, made it a point to say that his stated hope does not constitute a loss of faith in Musk or his company’s earning potential, despite opinion polls establishing the Tesla boss’s unpopularity with the American public and his net worth evidently tumbling about $23bn in recent days.Tsai said the stock markets also reacted negatively when Musk bought Twitter, the social media platform now known as X, in 2022 for $44bn. Yet he said Tsai Capital – which holds about 75,000 shares in Tesla as of its most recent quarterly filings – had made more than six times its money since first investing in the company in February 2020, even with the downturn in performance of late.Tsai recently told his investors in a letter that his firm considers Tesla to be more of a creator of advanced electronics and software that it attaches to cars rather than a traditional automotive manufacturer and he insisted that the EV maker remained “on a path to become one of the most valuable companies on the planet”.Nonetheless, he said “the market … reacting unfavorably to Elon Musk’s recent involvement in politics” was real. And though he said he thought Musk’s self-professed belief that government reforms are needed is genuine, Tsai expressed a hope that the Tesla boss’s role in Doge ultimately proved to be like other temporary commitments he had previously taken on.Tsai’s comments on what is his firm’s largest holding come at a time when Musk – who prominently supported Trump’s successful run for a second presidency – has advised the White House on the widespread firings of government employees and the dismantling of various services. Those services include US humanitarian aid and development work, with experts warning that their elimination could have life-threatening consequences.If a CNN poll conducted by the research firm SSRS is any indication, such measures have not gone over well with the public. The survey showed 53% of Americans disapproved of Musk, and 35% approved – leaving him about 18 points underwater.Those results were released on Wednesday, two days after Tesla’s stock fell more than 15% amid public protests against the company and vandalism reported at some of the brand’s dealerships.Tsai’s descent from a lineage of legendary investors sets his voice apart from some of the others who have weighed in on Musk, Doge and Tesla at the two-month mark of the second Trump presidency.His paternal grandmother was Ruth Tsai, who became the first woman to trade on the floor of the stock exchange in Shanghai, China, in 1939 during the second world war. Her earnings helped her send her son – Tsai’s late father, Gerald – to college in the US, where he ultimately settled and made a name for himself as a financier and fund manager.Gerald Tsai Jr also eventually became the chief executive officer of the financial services giant Primerica, which – along with its subsidiary Commercial Credit Group – helped build Citigroup, as the New York Times has reported.A notable aspect of Tsai’s trajectory was his father’s acquaintance with Trump when the latter was primarily a real estate mogul in Manhattan. The families were close enough that, in his youth, Tsai considered Donald Trump Jr his best friend, vacationing with him and once going to a baseball game with his siblings, their mother and their father.Tsai said the younger Trump was one of the first people to whom he came out as a gay man, doing so before he did to Gerald. “That’s cool,” Tsai recalled Trump Jr telling him, while he said Gerald took a longer time to accept it.A registered Democrat, Tsai said he had not had “a meaningful conversation with any member of” the president’s family since a lunch with Donald Jr in January 2014 – more than two years before Trump Sr clinched the Republican White House nomination and won his first presidency. Tsai said they just “went in different directions” as the Trumps moved into politics, and their family patriarch aligned himself closely with Musk as he clinched the White House a second time in November’s election.Meanwhile, the elder Tsai, who married and divorced four times and once survived crashing in a helicopter into New York’s Hudson River before his death in 2008, did not pass on much of his larger-than-life personality to Christopher.The younger Tsai for instance has been married to his spouse – with whom he is raising teenaged twins – since 2005.But, as Christopher put it, Gerald Tsai Jr did teach him to learn about – and love – trading stocks in his childhood. He began investing at 12 and started his capital firm in 1997 at age 22.Tsai said some of the principles to which he adheres – whether as a philanthropic donor to artistic as well as environmental causes – were inherited from the first Chinese American to be CEO of a Dow Jones Industrial company.“My father would say you have to do deep work in order to figure out where value is and to uncover great situations,” Tsai said. “Our job as investors is to figure out what’s real, what’s not real, what that’s worth, what’s priced into the stock and where the company’s valuation is going.” More

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      Tesla tells US government Trump trade war could ‘harm’ EV companies

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      Elon Musk’s Tesla has warned that Donald Trump’s trade war could expose the electric carmaker to retaliatory tariffs that would also impact other automotive manufacturers in the US.In an unsigned letter to Jamieson Greer, the US trade representative, Tesla said that it “supports fair trade” but that the US administration should ensure that it did not “inadvertently harm US companies”.Tesla said in the letter: “As a US manufacturer and exporter, Tesla encourages the Office of the United States Trade Representative (USTR) to consider the downstream impacts of certain proposed actions taken to address unfair trade practices.”The company, led by Musk, a close ally of Trump who is leading efforts to downsize the federal government, said it wanted to avoid a similar impact to previous trade disputes which resulted in increased tariffs on electric vehicles imported into countries targeted by the US.Tesla said: “US exporters are inherently exposed to disproportionate impacts when other countries respond to US trade actions. The assessment undertaken by USTR of potential actions to rectify unfair trade should also take into account exports from the United States.“For example, past trade actions by the United States have resulted in immediate reactions by the targeted countries, including increased tariffs on electric vehicles imported into those countries.”Trump has imposed significant tariffs that will affect vehicles and parts made around the world.The EU and Canada have announced large-scale retaliations for tariffs on steel and aluminium imports into the US, while the UK has so far held off on announcing any countermeasures.Tesla’s share price has fallen by more than a third over the last month over concerns about a potential buyer backlash against Musk, who has shown support for Germany’s far-right Alternative für Deutschland party, theatrically brandished a chainsaw at a conservative conference, and accused Keir Starmer and other senior politicians of covering up a scandal over grooming gangs.skip past newsletter promotionafter newsletter promotionThis week Trump said said he was buying a “brand new Tesla” and blamed “radical left lunatics” for “illegally” boycotting the EV company – a day after Tesla’s worst share price fall in nearly five years.Tesla said: “As USTR continues to evaluate possible trade actions to rectify unfair trade practices, consideration should also be given to the timeline of implementation. US companies will benefit from a phased approach that enables them to prepare accordingly and ensure appropriate supply chain and compliance measures are taken.” More

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      Donald Trump threatens 200% tariff on EU wine and champagne

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      Donald Trump has threatened a 200% tariff on wine and champagne from European Union countries, in the latest threat of escalation in the global trade war started by the US president against the country’s biggest trading partners.Trump said in a post on Thursday on his Truth Social platform that the tariffs on all alcoholic products from the bloc would be retaliation for a “nasty” 50% levy on American bourbon whiskey announced by the EU.The EU’s action against bourbon whiskey – due to come into force on 1 April – was itself part of a €26bn ($28bn) response to Trump’s 25% tariffs on steel and aluminium imports, which came into effect on Wednesday.Trump claims the US’s trading partners have taken advantage of the US and that tariffs will help him to bring back jobs – a theory that is roundly rejected by most mainstream economists.The tariffs on the EU, Canada, Mexico and China – and those imposed in retaliation – threaten to tip the US economy into recession, and Trump has admitted there may be a “period of transition” while businesses start producing more in the US.The White House has so far shrugged off the concerns of investors, after his tariff announcements were greeted with heavy stock market sell-offs that have wiped out all of the share price gains since his election in November.Despite starting the trade war, Trump appeared to be infuriated by the EU’s retaliatory measures.He wrote: “If this Tariff is not removed immediately, the U.S. will shortly place a 200% Tariff on all WINES, CHAMPAGNES, & ALCOHOLIC PRODUCTS COMING OUT OF FRANCE AND OTHER E.U. REPRESENTED COUNTRIES.“This will be great for the Wine and Champagne businesses in the U.S.,” he added.The US already circumvents the protected geographical origin rules on European products – American supermarkets are full of US-made imitations of champagne and other delicacies such as parmesan and gorgonzola.Senior figures in Europe vowed to hold firm. “We will not give in to threats,” the French foreign trade minister, Laurent Saint-Martin, wrote on X. “Donald Trump is escalating the trade war he chose to unleash.”France was “determined to retaliate” and would “always protect our sectors”, he added.Trump wrote on Thursday: “The U.S. doesn’t have Free Trade. We have “Stupid Trade.” The Entire World is RIPPING US OFF!!!” Channeling the former US president Franklin D Roosevelt, he added: “The only thing you have to fear, is fear itself!”In France, independent winemakers represent 60% of the country’s wine production. They are watching closely to see how the dispute plays out. “We’re very prudent at this stage,” said Jean-Marie Fabre, who makes wine in Fitou in the south of France.French winemakers were concerned they could be swept into the broader tariff row, and had feared tit-for-tat measures when the EU announced retaliatory tariffs on some American products, including US whiskey.skip past newsletter promotionafter newsletter promotion“The entire wine sector has been through a succession of crises of different kinds which have already really tested us, including the Covid crisis, inflation, the war in Ukraine and the climate issues,” said Fabre, who is also head of the Independent Winemakers of France. “Winemakers, whatever their size, but particularly small winemakers, have found themselves in a fragile position.”European shares fell on Thursday, amid concerns over the impact of a trade war. France’s Cac 40 index gave up morning gains to fall by 0.3%, while Germany’s Dax index fell by 0.6%.Leading European drinks giants came under pressure. Shares in Pernod Ricard fell almost 4% and Rémy Cointreau declined 3.5%. LVMH, owner of Moët & Chandon, slipped 1.4%.In New York, the benchmark S&P 500 dipped 0.7% after Wall Street opened for trading. Trump’s officials have attempted to brush off days of stock market declines, claiming they are not worried about it.“We’re focused on the real economy,” the treasury secretary, Scott Bessent, said during his latest interview on CNBC news network, a fixture on Wall Street. “I’m not concerned about a little bit of volatility over three weeks.”Trump also repeated a longstanding criticism of the EU, that the trading bloc “was formed for the sole purpose of taking advantage of the United States”, calling it “one of the most hostile and abusive taxing and tariffing authorities in the world”.Ursula von der Leyen, the president of the European Commission, the EU’s executive, said on Wednesday that trade between Europe and the US “brought prosperity and security to millions of people, and trade has created millions of jobs on both sides of the Atlantic”. More

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      EU retaliates against Trump tariffs with €26bn ‘countermeasures’

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      The EU has announced it will impose trade “countermeasures” on €26bn (£22bn) worth of US goods in retaliation after Donald Trump’s tariffs on steel and aluminium imports, escalating a global trade war.The president of the European Commission, Ursula von der Leyen, called the 25% US levies on global imports of the metals “unjustified trade restrictions”, after they came into force at 4am GMT on Wednesday.“We deeply regret this measure,” von der Leyen said in a statement, as Brussels announced it would be “launching a series of countermeasures” on 1 April. “The European Union must act to protect consumers and business,” she added.The commission said it would be targeting industrial products in response, including steel and aluminium, as well as household tools, plastics and wooden goods.In addition, the EU measures will affect some US agricultural products, such as poultry, beef, some seafood, nuts, eggs, dairy, sugar and vegetables, provided they are approved by member states.The retaliatory measures will also entail Brussels reimposing the tariffs on US goods including bourbon whiskey, jeans and Harley-Davidson motorbikes that it introduced during the first Trump term.“We will always remain open to negotiation. We firmly believe that in a world fraught with geopolitical and economic uncertainties, it is not in our common interest to burden our economies with tariffs,” von der Leyen said.France’s European affairs minister, Benjamin Haddad, said on Wednesday that the EU could “go further” in its response to the US tariffs. The measures “are proportionate”, Haddad told TF1 television. “If it came to a situation where we had to go further, digital services or intellectual property could be included,” he said.Britain would not issue its own immediate measures in response to the US tariffs but was going to “reserve our right to retaliate”, a UK minister said.The exchequer secretary to the Treasury, James Murray, told Times Radio the levies were disappointing but “we want to take a pragmatic approach, and we’re already negotiating rapidly toward an economic agreement with the US, with the potential to eliminate additional tariffs”.Asked by Sky News whether Britain’s response to the levies could be called weak in comparison with Brussels, Murray said the UK was in a “very different position than the EU” and does not want to be “pushed off course” as it pursues a trade deal with Washington.“We think the right response is to continue pragmatically, cool-headedly, without a knee-jerk response, but toward our economic agreement that we’re negotiating with the US to secure, because that’s in the best interests of the UK,” he said.skip past newsletter promotionafter newsletter promotionHis comments came after the prime minister, Keir Starmer, said on Tuesday that Britain would not respond with its own counter-tariffs, after last-ditch efforts to persuade Trump to spare British industry from his global tariffs appeared to have failed.The UK steel industry warned that Trump’s tariffs “couldn’t come at a worse time”, and said the move would have “hugely damaging consequences for UK suppliers and their customers in the US”.Gareth Stace, the director general of the trade association UK Steel, called the Trump administration’s move “hugely disappointing”. He said: “President Trump must surely recognise that the UK is an ally, not a foe. Our steel sector is not a threat to the US but a partner to key customers, sharing the same values and objectives in addressing global overcapacity and tackling unfair trade.“These tariffs couldn’t come at a worse time for the UK steel industry, as we battle with high energy costs and subdued demand at home, against an oversupplied and increasingly protectionist global landscape.”The introduction of EU measures came after a day of drama on Tuesday, when Trump threatened to double tariffs on Canadian steel and aluminium in response to Canadian threats to increase electricity prices for US customers.The US president backed off from those plans after the Ontario premier, Doug Ford, agreed to suspend his province’s decision to impose a 25% surcharge on electricity exports to the states of Minnesota, Michigan and New York. More

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      Trump threatens to raise Canadian steel and aluminum tariffs to 50%

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      The looming trade war between the US and Canada escalated on Tuesday as Donald Trump threatened to double tariffs on Canadian steel and aluminum after Canadian threats to increase electricity prices for US customers.On Tuesday morning Trump announced plans to double tariffs on Canadian steel and aluminum from 25% to 50% and once again threatened to annex Canada as retaliation for the province of Ontario’s imposition of a 25% surcharge on electricity exports to several US states, in a dramatic escalation of the trade war between the two ostensibly allied countries.The news set off another stock market sell-off on Wall Street that was tempered when Ontario’s premier, Doug Ford, said he made a deal with the US commerce secretary, Howard Lutnick, to suspend Canada’s 25% tariff on exports of electricity to Michigan, New York and Minnesota after Lutnick agreed to discuss renewing existing trade relations.Incorrectly calling Canada “one of the highest tariffing nations anywhere in the world”, Trump said he had instructed his secretary of commerce to increase levies on the metals due to start Wednesday morning. He also threatened more tariffs on 2 April on the car industry that would “essentially, permanently shut down the automobile manufacturing business in Canada”.Asking rhetorically why the US received electricity from another country, he accused Canada of using energy, “that so affects the life of innocent people, as a bargaining chip and threat” and said “they will pay a financial price for this so big that it will be read about in History Books for many years to come”.After the news that Ontario was suspending its electricity hikes, Trump said he would “probably” reconsider imposing the higher tariffs on Canada.Mark Carney, Canada’s incoming prime minister, called Trump’s latest move “an attack on Canadian workers, families and businesses” and promised to “keep our tariffs on until the Americans show us respect and make credible, reliable commitments to free and fair trade”.The Trump administration was also reportedly preparing on Tuesday to institute a new rule that would require some Canadians staying in the US for more than 30 days to register personal information and agree to fingerprinting, according to Bloomberg. Currently there is largely frictionless travel for citizens between the two countries.The fractious economic battle between the US and Canada has developed even graver undertones as Trump makes increasingly aggressive threats for the US to absorb its northern neighbour. Although at first claiming that he wanted Canada to crack down on fentanyl, Trump has now accused the US ally of underpaying for military protection and incorrectly described the trade imbalance with Canada as a $200bn subsidy from the US.Trump coupled his tariff declaration with openly aggressive language about making Canada “our cherished Fifty First State”, repeating a constant refrain over the last few months. He claimed American statehood for Canada would make “all tariffs, and everything else, totally disappear”, called the border “an artificial line of separation drawn many years ago” and suggested the Canadian national anthem, O Canada, would become a state anthem.The rhetoric has inspired a rare unity among Canadian politicians, with Carney campaigning for Liberal leader on standing up to Trump, and saying to a standing ovation in his acceptance speech on Sunday that “Canada never, ever will be part of America”.Trump’s moves are just the latest in the chaos around the president’s trade policy, amid tumbling stock markets and fears it could trigger a possible US recession.The White House’s strategy so far has been to play down the anxiety on Wall Street, even as stocks waver. After Trump refused to rule out the possibility of a recession in an interview with Fox News over the weekend, the Nasdaq had its worst day on Monday since September 2022, dropping 4%.Shares in US automakers also fell after the announcement, as traders bet that high metal tariffs would drive up costs for the American industrial sector, eating into their profits. Ford Motor dropped nearly 4%, while General Motors dipped by 1.3%. Shares in the carmaker Stellantis – which has several manufacturing facilities in Canada – fell by more than 5%.Price premiums for aluminum on US physical market soared to a record high above $990 a metric ton, Reuters reported.The Ontario premier Ford has said that Trump must take the blame if there is a recession in the US, telling MSNBC on Tuesday: “If we go into a recession, it will be called the Trump recession.”Ford has said in the past that he would be willing to cut off US energy supply from Canada completely in response to Trump’s tariffs.“We will be relentless,” Ford said, adding he would not “hesitate” to shut off electricity exports to the US if Trump continues the trade war.“That’s the last thing I want to do. I want to send more electricity down to the US, to our closest allies or our best neighbors in the world. I want to send more electricity.” But, he said, “Is it a tool in our toolkit? One hundred per cent, and as he continues to hurt Canadian families, Ontario families, I won’t hesitate to do that.”Ford also encouraged American CEOs, who have been largely silent on the trade war and threats to Canadian sovereignty, to speak up. On Tuesday Trump is set to meet with the Business Roundtable, an influential group of business leaders that includes the CEOs of Google, Amazon and JPMorgan.Ford said: “We need those CEOs to actually get a backbone and stand in front of him and tell him, ‘This is going to be a disaster. It’s mass chaos right now.’”The group said in a statement last week that while it supported trade policies that “open markets to US exports, revitalize the domestic manufacturing base and de-risk supply chains”, it called on the White House to “preserve the benefits” of the US-Mexico-Canada Agreement (USMCA), which Trump himself signed in 2020 but has since apparently violated by suddenly imposing steep tariffs on both countries.Tariffs of 25% on steel and aluminum imports were already slated to apply to all countries globally on Wednesday, after Trump announced them last month.Both consumer and business confidence has dropped in the US since Trump entered office.A survey published on Monday in Chief Executive magazine found that CEOs’ rating of the current business climate fell 20% in January, from 6.3 out of 10 – with 1 being “poor” and 10 being “excellent” – to 5, the lowest since spring 2020.
      Meanwhile, consumer confidence measured by the Conference Board found that confidence dropped over 6% in February, its biggest month-to-month drop since August 2021.Trump had not yet spoken with Carney, said the White House press secretary Karoline Leavitt on Tuesday, arguing that the tariffs on Canadian metals “was a retaliatory statement due to the escalation of rhetoric that we’ve seen out of Ontario, Canada”.“I think Canada is a neighbor. They are a partner. They have always been an ally,” she said, adding: “Perhaps they are becoming a competitor now.” More