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      Michigan autoworkers wary of Trump’s tariffs: ‘Playing poker with people’s lives’

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      The General Motors Flint Assembly plant is a hulking symbol of American auto industry might, a 5m-sq-ft factory stretching as far as the eye can see down Van Slyke Road, and it hums: three shifts almost daily crank out the Silverado truck, the automaker’s most popular product.The plant weathered decades of industrial disinvestment in Flint, a blue-collar city of about 80,000 in mid-Michigan, the nation’s auto capital. Flint Assembly remains an economic cornerstone of a Rust belt region filled with working-class swing voters who helped propel Donald Trump to his second term.The president did well here in part because he promised an industrial revival that will regenerate towns like Flint. On the campaign trail he promised tariffs would achieve this goal. This week the tariff war kicked into a higher gear. The reviews are mixed.Autoworkers, small business owners and residents here say tariffs could help Flint, but many aren’t comforted by what they characterized as Trump’s haphazard approach, higher prices on everyday goods and the prospect of middle-income folks becoming “collateral damage”.“Trump is playing poker, but he’s playing poker with people’s lives at this point,” said Chad Fabbro, financial secretary of United Auto Workers (UAW) Local 538 in Flint. Even the union is a house divided. The UAW president, Shawn Fain, supports tariffs, but Fabbro said many of the 5,000-strong rank and file at Flint Assembly see them as “bullshit”.Onshoring industry is a good idea, if well planned, Fabbro added, but an abrupt, full-scale tariff war is “not good for anyone because middle America is going to suffer”.Before Trump partly pulled back on Wednesday, his unprecedented trade war enacted at least 10% tariffs on nearly every country in the world last week, while hitting China, Taiwan and Vietnam with much higher rates. The war with China has escalated.There’s little disagreement about whether the tariffs would cause prices to increase for everyday goods like clothing, electronics and groceries – some estimate it could cost the average US household $3,800.In Flint, the debate seems to be: “Is the president’s political and economic gamble worth it?”The president’s supporters say “yes”, and have pushed variations of a message: any economic pain will be worth the benefits of a restructured world economy. Among them is Brian Pannebecker, a retired Ford employee who started Auto Workers for Trump.“It’s going to cause a little short-term pain, but we’re going to have to endure it for six months or a year, however long it takes,” he said last week. “The workers of this country have been enduring pain for decades as they closed plants down.”But among small business owners in downtown Flint, there’s some doubt about the idea of more pain in one of the nation’s poorest big cities – about 35% live in poverty.“The person who said that must be coming from a place of privilege because it is obvious that they’re going to be OK for the next year or so, but I think a lot of people are not in the same boat, so we have to be mindful of that,” Rebekah Hills, co-owner of Hills’ Cheese, said on Tuesday.Her shop imports about half of its product from countries such as the Netherlands, France and England – the cost of those products would go up 10% under Trump’s latest plan, or more if he changes his mind. “It really sucks because it’s small businesses that suffer the most,” Hills added.Frustration with stubbornly elevated prices – especially among foods – was largely behind a relatively strong Trump showing in 2024 in Genesee county, where Flint is located. He had lost to Biden and Hillary Clinton here by about 10% in the two previous elections, but closed the gap to 4% last year. Just north, in Saginaw county, also part of Michigan’s auto industry heartland, the president edged out Kamala Harris.Democrats in Michigan, some of whom are fiercely critical of free trade agreements, are calibrating their messaging with these things in mind. Among those who support tariffs is US representative Debbie Dingell, whose district near Detroit is home to many rank-and-file autoworkers.“I think tariffs are a tool in the toolbox so that we are competing on a level playing field with China, who subsidizes production, owns the companies and doesn’t pay a decent wage,” Dingell recently told WDET. “But it can’t be done chaotically.”Trump’s approach was damaging the economy, she said, but she also noted that 90% of the nation’s pharmaceuticals are imported, and onshoring that kind of production was a good idea. But, Dingell added, “you can’t do it overnight”.On Wednesday, just after Trump pulled back on most tariffs, the conservative-leaning Michigan political analyst Bill Ballenger said he wasn’t surprised by the abrupt announcement. The tariff rollout wasn’t going well for Republicans in Michigan or nationally, he said. It was more “too much, too soon” from the administration.“The public understands the tariffs and they get his overall goal and mission, but the way he’s implementing them seems incoherent,” Ballenger said. However, what that may mean in 19 months when the next elections happen is anyone’s guess, he added.skip past newsletter promotionafter newsletter promotionWill Flint be OK?Alan Jackson, a retiree from an auto supplier, echoed the president’s line. “Why does China and everyone else get to take advantage of us? Why do they get to screw us? I’m glad someone is standing up to that.”Jackson dismissed the fears of higher prices and economic damage. “People will be fine – it’s worth it,” he added.But polls showed a major drop in Trump’s approval rating, and in downtown Flint people are worried.The Flint farmers’ market, in a repurposed newspaper printing press building, is a local economic hub where a half-million people annually shop for everything from locally grown produce to local jerky.But many here partly rely on imports. Tony Vu, a restaurateur and leader in the local food system, is about to reopen his Vietnamese restaurant, MaMang. The uncertainty is generating fear of supply chain shortages, Vu said: “It seems like deja vu, but with no end in sight.”The tariffs especially take a toll on south-east Asian, Latino and other chefs of color importing goods that can’t be produced here – avocados don’t grow in Flint, Vu noted, and Michigan’s growing season is only five months long. Imports are essential.A case of fish sauce, a staple of Vietnamese cuisine, went from about $82 to $100 just on the speculation that tariffs were increasing, highlighting another problem – some companies use disruptions to the economy as an excuse to raise prices, even if they don’t need to.“It’s going to take an industry that already operates on thin margins and is really hard, and it’s going to create more pressure,” Vu said. “If businesses are not quick enough to adapt, then it’s going to be a death blow.”At d’Vine Wines, with shelves full of bottles from France and Italy, manager Aaron Larson said on Tuesday he was not totally sure what to make of the tariffs yet, but he doesn’t trust Trump. Fabbro, of the UAW, pointed to massive increases in Canadian aluminum prices that were a threat to Michigan’s robust craft brewery industry. Meanwhile, his neighbors where he lives in rural Vassar, a few miles north of Flint, grow soybeans they sell to China.About 40% of US soybean exports go to China, which just hit them with an 84% tariff on all US goods (later raised to 125%). They’re scared, Fabbro said.‘That’s how capitalism works’Auto Workers for Trump’s Pannebecker said that corporations should “absorb” some increased costs, and added that the unions are trying to have it both ways – they want higher wages but they want cars to be affordable. Something might have to give, he said.“The market will settle itself out because that’s how capitalism works,” he said.The president’s supporters trust his judgment.“He’s a shrewd businessman, right? That’s why people vote for him, so I say let’s give it a chance, but if the cost of everything goes up then maybe he has to pull back at some point,” said Russ, an autoworker at the farmers’ market who would only give his first name.At the UAW local hall across from the Flint Assembly plant, Fabbro isn’t convinced, and fears layoffs. “It’ll only be a few years? OK, don’t feed your kids for a few years. Sell your boat and home and everything you’ve worked for because you’re willing to be a bargaining chip,” he said. More

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      in US Politics

      No retreat on tariffs, Trump promised. Hours later, he blinked

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      He vowed: “My policies will never change.” He insisted: “Sometimes you have to take medicine to fix something.” He boasted: “I know what I’m doing.” And at 9.33am on Wednesday, he entreated: “BE COOL. Everything is going to work out well.”But less than four hours later, Donald Trump blinked. As the economic and political pressure became unbearable, the US president announced on social media that he would pause for 90 days higher trade tariffs for most countries, excluding China.It was a dramatic climbdown by a leader who has spent years cultivating the image of a strongman able to project indifference through every storm. White House aides immediately swung into gear, attempting to spin the retreat as the masterstroke of peerless dealmaker and genius chess player.The damage had been done, however. Damage to America’s standing as an honest broker and dependable ally. Damage to the US dollar and financial system as the world’s anchor of financial stability. And damage to Trump’s reputation on his signature issue, the economy, in the eyes of business leaders, Republicans and voters.“It’s obviously far too soon to talk about a failed presidency, but to me there are clear indications that Donald Trump’s presidency is endangered,” said Larry Jacobs, director of the Center for the Study of Politics and Governance at the University of Minnesota. “That’s an extraordinary statement for month three, but he’s taken such extreme measures and the responses are unusual, particularly for Republicans. They’re very demonstrative and they’re very directed at his power.”The past two weeks have witnessed the most volatile period for financial markets since the coronavirus pandemic lockdowns five years ago. This time, however, the cause is not a highly contagious virus but the grievances and whims of one man.On 2 April, standing in the White House Rose Garden, Trump announced sweeping “reciprocal” tariffs on dozens of countries, billing it as a “declaration of economic independence” on a “liberation day” that would restore America’s “golden age”. After decades of getting ripped off, he claimed, “it’s our turn to prosper”.The tariffs were calculated based on a country’s trade deficit with the US divided by the value of goods imported from that country. The formula was immediately criticised for inaccuracies and absurdities, such as assigning tariffs to Heard Island and McDonald Islands, which are inhabited entirely by penguins.Yet in Trump’s telling, the long-threatened tariffs were a necessary measure to restore US manufacturing and address trade imbalances. The Rose Garden event was attended by workers in hard hats and yellow construction vests – a reminder of how Trump has sought to steal Democrats’ identity as the party of the working class.Some analysts on the left and the right agree that the US industrial midwest was hit hard by globalisation with factories shuttered, communities hollowed out and jobs shipped overseas. But few believe that Trump, who for decades has believed that the US is getting ripped off, and his sledgehammer approach to tariffs are the right solution.Bill Galston, a senior fellow at the Brookings Institution thinktank in Washington, said: “I have always believed that his understanding of when America was great was in the 1950s and 1960s, when 30% of the workforce was in manufacturing and when the rest of the world was flat on its back and America bestrode the world like a colossus.“His dream is to restore that America to the greatest extent possible, and he genuinely believes that high tariff walls will force people who are doing manufacturing in China and all across south-east Asia and elsewhere to come here.”Galston added: “It is, most economists would say, a fantasy that could make a difference at the margins. Right now, manufacturing employment in the United States as a share of the total is 8%, down from its peak above 30% in the 1970s, and that’s not going to be reversed.”Trump had effectively taken the world economy hostage. The repercussions were immediate and widespread, including market instability, strong international condemnation, retaliatory measures from China and deep uncertainty for businesses and consumers.View image in fullscreenLarry Summers, a former treasury secretary, described it as “the biggest self-inflicted wound we’ve put on our economy in history”. Some chief executives who had backed Trump in last year’s election expressed buyer’s remorse as their fortunes sank. Tech giants such as Apple saw their stock prices drop; analysts predicted potential price increases for iPhones by as much as 43%.In the White House, Trump’s closest advisers were rattled. Elon Musk, the world’s richest man, engaged in a highly public and insulting feud with Trump’s trade adviser Peter Navarro over the impact of tariffs on Tesla, calling Navarro a “moron” and “dumber than a sack of bricks”.Trump insisted he was right and elite opinion was wrong. As he blithely golfed over the weekend, even as markets crashed and haemorrhaged trillions of dollars, the treasury secretary, Scott Bessent, flew to Trump’s Mar-a-Lago estate in Florida to plea for a strategy that could include improved trade deals with foreign countries.Republicans were anxious as they heard the complaints of constituents worried about retirement savings. Some spoke out or considered legislation to curb Trump’s tariffs power. Senator Ted Cruz, a staunch Trump supporter, warned: “Tariffs are a tax on consumers, and I’m not a fan of jacking up taxes on American consumers.”It was a notable break from a party long criticised for a sycophantic, cultish devotion to Trump on all other issues. James Bennet, a columnist for the Economist magazine, told the Guardian’s Politics Weekly America podcast: “There are limits to how far Donald Trump can go and it is conceivable that Republicans could rise up against him.skip past newsletter promotionafter newsletter promotion“They haven’t been willing to do it as Donald Trump has embarked on this campaign of retribution, using the justice department to punish his foes. They haven’t been willing to do it over speech issues or the deportation of completely innocent people to a prison in El Salvador. But these tariffs were a step too far for them and that’s a signal that there is the possibility of Republican resistance at some point to this administration, which is the only thing that can really restrain it.”The mounting pressure from Republicans, business leaders and financial markets stoked fears of a recession that could even tip into a depression. Finally, Trump yielded and, on Wednesday, announced a 90-day pause for most countries while inviting them to negotiate bilateral trade deals.Antjuan Seawright, a Democratic strategist, said: “He saw the pressure from not only the American people but he saw people from within his own ecosystem screaming and yelling about how bad this was. Donald Trump has a history of caving because he is a paper tiger leader in many ways and this was just further proof of that. He wants to play hardball but with a soft bat.”White House aides argued otherwise, deploying the Trump playbook learned from his lawyer Roy Cohn: always claim victory and never admit defeat. Stephen Miller, White House deputy chief of staff, tweeted: “You have been watching the greatest economic master strategy from an American president in history.”But the president himself admitted that he had been monitoring the bond market and people were “getting a little queasy” as bond prices had fallen and interest rates increased. He said: “People were jumping a little bit out of line. They were getting yippy.”Even Trump, whose second term has been characterised by audacity, impunity and brazen lies, had reached the capacity of his reality distortion field and its amplification by rightwing media. The cold facts of the market were not to be denied.Kurt Bardella, a strategic communications adviser, said: “We’re seeing now, for the first time in Trump 2, the limitations of propaganda, of drinking your own Kool-Aid. There are economic realities, market realities that are larger than the lie that they tell themselves and the American people over and over again. Their attempt to try to sell that lie to the world clearly did not work.“He can go out there all day long till he’s blue in the face and say to friendly media and his Maga puppets [that] we’re being ripped off and this will lead to the greatest economic boom we’ve ever seen – but no one else is believing it. The private sector that he has propped himself up on for so long completely rejected all of this.”Bardella, a former congressional aide, added: “For all the ‘Let’s run the government like a business’ crowd, if any business ran themselves this way there would be a vote of no confidence and that CEO would be ousted that very day for deliberately tanking that company’s own stock.”After an initial surge, the markets dipped again. While the pause has offered a temporary reprieve, a 10% blanket duty on almost all US imports remains in effect. Karoline Leavitt, the White House press secretary, claimed on Friday that more than 75 countries have contacted the Trump administration with a view to addressing trade issues. “The phones have been ringing off the hook to make deals,” she said.But it remains uncertain whether the US will be able to secure significant concessions from other countries within 90 days. The mercurial nature of Trump’s decision-making on the on-again, off-again levies could add to the whiplash while eroding faith in the US and the reliability of the dollar.And the trade war with China continues to escalate, posing a significant threat to the global economy. Trump raised tariffs on China to 145%, prompting retaliation. US consumers are likely to feel the pain from price hikes on clothing and other products. China also threatened further non-tariff measures, such as blacklisting US companies and restricting exports of rare earth minerals.Larry Sabato, director of the Center for Politics at the University of Virginia, said: “It’s not over at all. The worst part is probably ahead because of China. Is he going to work out a deal with all these other countries? Get real. He has scrambled everything and America is no longer trusted in any sphere now – defence, international relations, economics. It’s sad.” More

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      in US Politics

      Price hike on Shein? How Trump tariffs could shift the US’s love of fast fashion

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      After a chaotic week of flip-flopping tariff policies, cheap clothes from China are nearly certain to face a steep price hike soon – prompting concern among fast fashion retailers and potentially pushing consumers to look for other alternatives.As part of a package of global tariff policies announced on “liberation day” last week, Donald Trump signed an executive order that ended a duty-free exemption for low-priced goods to enter the US from China and Hong Kong. Known as the “de-minimis” rule, packages under $800 do not qualify for any taxes or tariffs on the goods and are inspected minimally at the border.Conceived as a means to allow Americans to bring back low-cost goods to the US from abroad, fast fashion giants including Shein and Temu have used the rule to send low-cost e-commerce purchases to the US with few expenses.Alon Rotem, the chief strategy officer for ThredUp, an online thrift store, welcomed the executive order.“With the proliferation of fast fashion, this is something we’ve really supported because it creates an unfair competitive advantage,” he said.Ending the de-minimis rule has been a target of bipartisan legislators in recent years as the value of goods entering the US under the rule soared from about $5.5bn in 2018 to $66bn in 2023, according to a congressional report. Nearly two-thirds of packages under the rule were shipped from China and Hong Kong, said a US International Trade Commission briefing.ThredUp has pushed for legislation to end the de-minimis rule through the American Circular Textiles, a trade group it helped found that advocates for strengthening domestic supply chains. Other members include the RealReal, Reformation and H&M.“This change was coming,” said Derek Lossing, the founder of Cirrus Global Advisors, a global logistics firm. “Maybe it’ll catch consumers by surprise, but it’s ultimately not catching the brands significantly by surprise.”Some companies have already begun diversifying their production outside of China. Others have evolved their business model to begin stocking more inventory in the US as well as moving some production here and then fulfilling orders domestically, Lossing added.Trump first announced the rule change in February, but then recanted in order to give border agents time to figure out how to address an influx of so many packages that will require more extensive inspection.It is currently expected to take effect 2 May. After that, the packages will be subject to a tariff rate of 30% or $25 an item, rising to $50 an item on 1 June. When China responded with retaliatory tariffs this week, Trump hit back and then tripled the rates for previously exempt packages to 90% or $75 an item, rising to $150 on 1 June.“Everyone’s just pulling up their pants and bracing for impact,” said Jason Wong, who works in product logistics for Temu in Hong Kong. “We know it’s going to be a mess.”Wong said one plan is to make more of a push into Europe as well as Australia, which has its own de-minimis rule that goods under $1,000 can enter the country without taxes or tariffs.“We know for a fact that the demand from the US and North America will significantly decrease,” he said.Shein and Temu did not respond to requests for comment about any shifts to their business model in response to the forthcoming rule change.Rotem, the ThredUp executive, said the rule change creates an opening for consumers to consider other options, including buying secondhand clothes. While he acknowledged that shoppers care about sustainability, he said it’s a secondary decision of consumers to price.“All of a sudden, if ultra fast fashion is now 30% or so more expensive, it really does make the value proposition that much more compelling for resale,” he said.skip past newsletter promotionafter newsletter promotionSome retail experts cautioned that the rule change may not deter consumers from options like Shein or Temu, because many of their items are so inexpensive to begin with.“Americans’ love affair with cheap goods is not over,” said Jason Goldberd, chief commerce strategy officer at Publicis Groupe, a global communications firm. “Even with the tariffs, the products still may be attractively priced.”Rotem said he saw promise in the shift: “We’re never going to get this thing perfect, but the progress with public policy to encourage resale is something that we’re going to support.”While the de-minimis rule change remains intact for now, anxiety and confusion is also high amid a whiplash in policies and wild market swings. On Wednesday, Trump ordered a 90-day freeze on tariffs, though kept a 10% flat rate tariff intact and then raised tariff rates for China.“Based on the lack of respect that China has shown to the World’s Markets, I am hereby raising the Tariff charged to China by the United States of America to 125%, effective immediately,” Trump wrote.On Friday, China responded by raising its tariff rate to 125% as well. An official said it would not raise the tariff rate any further than that.Wong, who works in Temu logistics, said that there have been so many changes to the policies, that partly the move will be to simply keep watching for now.“We don’t know how long this de-minimis thing is going to last,” he said, adding that backlash from consumers could lead to yet another policy shift.Goldberg echoed that sentiment, calling it “a dynamic situation”.“It may be different tomorrow,” he said. More

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      in UK Politics

      Tariffs live: Trump makes major China tariffs concession as US-UK trade deal ‘only days away’

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      Related: Trump declares war on showers to ‘take care of my beautiful hair’Donald Trump’s administration appears to have made another concession on their Liberation Day levies by excluding smartphones, laptops and computer chips from its steep “reciprocal” tariffs.It is the first sign of Trump’s softening stance towards China with the majority of iPhones produced in the country, hit hard by 145 per cent levies.The announcement late on Friday would also benefit big tech companies such as Apple and Samsung.The US Customs and Border Protection said items such as smartphones, laptops, machines used to make semiconductors and flat-panel monitors would be exempt.It came as reports suggested that a breakthrough between UK and the US over tariffs could be reached in the coming days.With just 90 days for the US to strike more than 90 deals, senior government sources told The Times that conversations over a potential agreement with Mr Trump would be held soon.Chancellor Rachel Reeves told reporters: “Of course we want to secure the best deal possible for British jobs and British industry. And we are absolutely … resolved to do everything we can.”UK government to cut tariffs on 89 products in bid to lower costs for businesses and consumersSir Keir Starmer’s government has announced it will temporary suspend the UK global tariff on 89 products in order to ease pressure on businesses in the face of Donald Trump’s global levies.The UK global tariff – which applies to goods entering the UK that do not qualify for preferential treatment under free trade agreements – will be suspended until 2027 on a wide range of products including pasta, fruit juices, agave syrup, plant bulbs, plywood and plastics.Business secretary Jonathan Reynolds said: “From food to furniture, this will reduce the cost of everyday items for businesses, with savings hopefully passed onto consumers. “As we face a new era of global trade, this government is going further faster to make Britain the best country to do business, delivering on our Plan for Change. These suspensions are just another example of that.”Andy Gregory13 April 2025 15:41Markets ‘trapped by uncertainty’ over tariffs, warns analystThe stock market remains “very unsettled” as investors weigh how to price in any economic fallout from the changing tariff backdrop, Mark Luschini, chief investment strategist at the firm Janney Montgomery Scott told Reuters.The market is “kind of trapped by the level of uncertainty that lurks out there”, Luschini said. “And therefore investors are largely unwilling to make big bets in one direction or another.”Andy Gregory13 April 2025 15:21US commerce secretary says exempted electronic products to come under separate tariffsIn an interview with ABC’s This Week, US commerce secretary Howard Lutnick has said that smartphones, computers and some other electronics including semiconductors will come under separate tariffs.Mr Lutnick said these separate tariffs may be imposed in a month or so.Andy Gregory13 April 2025 14:42Trump’s car tariffs expected to cost industry over $100bn, with millions fewer cars soldWall Street and industry analysts have warned of massive global implications for the car manufacturing industry if Donald Trump’s 25 per cent import tariffs remain in place, with vehicle sales plummeting by millions as prices for both new and used cars surge, according to reporting by NBC News.In the US alone, car manufacturers could see costs increase by $107.7bn, according to the Michigan-based think tank, the Centre for Automotive Research. That figure includes $41.9bn for the big three US firms – General Motors, Ford, and Stellantis, the parent company of Chrysler.These reports take into account both the 25 percent tariff on imported vehicles that went into effect 10 days ago, and the forthcoming 25 percent tariff on auto parts that begins on 3 May.Oliver O’Connell reports from New York:Andy Gregory13 April 2025 14:06China welcomes Trump climbdown on electronics as ‘small step to correct’ tariffsChina has said it is evaluating the impact of Donald Trump’s decision to exclude phones, laptops and other electronics from his global tariffs. In a statement on Sunday, China’s commerce ministry called the move a “small step by US to correct its wrong practice of unilateral ‘reciprocal tariffs’.”“The bell on a tiger’s neck can only be untied by the person who tied it,” the ministry said, urging the US to make a major step in correcting what it called its wrongdoing and cancelling the tariffs completely.Andy Gregory13 April 2025 13:18Watch: Penguins to hold ‘protest march’ against Trump over tariffs gaffePenguins to hold ‘protest march’ against Trump over Heard and McDonald islands gaffeAndy Gregory13 April 2025 12:54Business secretary insists he is ‘closely engaged’ on securing UK-US trade dealBusiness secretary Jonathan Reynolds has said he is “closely engaged” with Washington on securing a trade deal to avert Donald Trump’s so-called “reciprocal” tariffs. Asked when he expects to secure a UK-US trade deal, Mr Reynolds told Sky News: “Look I can’t give a timeline on that. We remain closely engaged. I had an exchange with my counterpart ambassador [Jamieson] Greer – I woke up to a message this morning from him. We remain engaged around that.“The president himself, clearly, is the driving force and the decision-maker, as you would expect on the US side. I welcome the pause in the wider tariffs, we did receive a preferential position”.But he insisted: “I am never going to be satisfied when there are barriers to trade between ourselves and the US, as I would do with any other key market. And I believe there is a way through.“The next step is they are going to come back to us on some of the proposals we have put [forward].”Andy Gregory13 April 2025 12:35Labour ministers ‘don’t seem to be able to criticise Trump tariffs’, warns former party chairFormer Labour frontbencher Harriet Harman has warned that Sir Keir Starmer’s government appears to have a “restricted vocabulary” preventing ministers from speaking out against Donald Trump’s trade tariffs. Speaking on Sky News’s Electoral Dysfunction podcast, Baroness Harman said: “They don’t seem to be able to be telling the country what I think the country needs to hear them saying, which is that what Trump is doing is a bad thing. “They need to show that judgement about: it’s not okay for somebody in the largest economy in the world to wreak havoc, not only on their own country, but on our country and the rest of the global economy.Baroness Harman pointed to the example of when the US put steel tariffs on the UK during the previous Labour government, recalling – in her words – Tony Blair as saying that such a move was “unacceptable” and that George “Bush has got it wrong”.She continued: “It feels as if there’s a kind of restricted vocabulary amongst ministers at the moment, where they are speaking in code – ‘this is not where we want to be, we don’t want to see a trade war, we’re for open markets’ – but they’re not able to say about the elephant in the room, which is that Trump is wrong on this, we don’t agree with him.“The other thing I think they should be doing is, they should be being more positive and giving more reassurance.”Andy Gregory13 April 2025 12:06Looser food standards off the menu in any US-UK trade deal, says business secretaryBusiness secretary Jonathan Reynolds has insisted that looser food standards remain off the table in talks for a UK-US trade deal, which he said would breach Labour’s promises during the general election campaign.“We will never change our SPS (sanitary and phytosanitary) food standards. We’ve made that perfectly clear to the United States,” he told Sky News.Andy Gregory13 April 2025 11:48China puts government officials on ‘wartime footing’ over Trump tariffs, report saysChina has put civilian government officials in Beijing on “wartime footing” and ordered a diplomatic charm offensive aimed at encouraging other countries to push back against Donald Trump’s tariffs, four people familiar with the matter have told Reuters. Communist Party propaganda officials have played a leading role in framing China’s response, one of the people said, with government spokespeople posting defiant clips on social media featuring former leader Mao Zedong saying “we will never yield”.As part of the “wartime” posture, officials in China’s foreign affairs and commerce ministries have been ordered to cancel holiday plans and keep their mobile phones switched on around the clock, two of the sources said. US-facing departments have also been beefed up, including with officials who worked on China’s response to Mr Trump’s first term, they said. Andy Gregory13 April 2025 11:12 More

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      ‘It’s going to be messy’: Americans on how Trump’s tariffs are shaping their spending

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      A few weeks ago, Dane began stocking up on “paper products”, “cases of paper towels, toilet paper”, “piddle-pads” for their shih-tzu, and his wife upgraded from an iPhone 8 to 14.The 73-year-old in South Carolina said the purchases – which were made to get ahead of Donald Trump’s trade policies – reminded him of the early weeks of the Covid pandemic, when he scrambled to buy masks, gloves and toilet paper.“It’s scary,” Dane said. “Prices are going to go up because of tariffs … It’s going to be messy.”While campaigning last year, Trump constantly touted his love of tariffs. But it was not until his so-called “liberation day” on 2 April – where the president announced sweeping duties on incoming goods, punishing competitors, allies and small and developing countries alike – that he spooked global financial markets and provoked fears of spiralling inflation and stagnant growth.Amid a US government bond sell-off, the president paused his most eye-watering tariffs for 90 days, apart from China, whose goods are set to be hit with a 145% levy.Hundreds of Americans got in touch with the Guardian to share how the uncertainty is affecting their consumption habits.Dane, who is retired, worked as an entrepreneur with his wife most of his career before later becoming an English teacher. He said he was a Republican in the 1980s but is fearful about how the US is “not going the right way” under Trump, and is unhappy with his “dystopian” policies towards global allies, the economy, education, scientific research and more.View image in fullscreenCurrently, Dane is on a trip to Paris and plans to bring home consumer goods potentially hit by 10% tariffs on European Union imports.“We’ll probably be getting tea, bringing back some cheese, some butter,” he said. “I would love to bring back eggs but that would be a disaster. I’d have scrambled eggs in my suitcase.”Amid tariff uncertainty, Heather, a 61-year-old college professor in Texas, said she and her husband can mostly weather food cost fluctuations, but brought forward the purchase of a new car “inanticipation of price hikes”.She said they owned a 14-year-old Mini Cooper, which ran on gas, that they planned to replace with a hybrid vehicle at some point. They decided to replace their car now to avoid potential inflation – and reduce expenditure on gas.“The economic instability of the Trump administration certainly gives one pause,” she said. “It’s just so much instability, chaos and [the] unknown.”It’s a similar story for Stefanie, a 56-year-old educator and former tech worker in Nevada, who bought a Toyota Tacoma to replace her old Jeep as well as converting some investments into cash.Stefanie began strategizing about being more resilient to tariffs as soon as Trump was elected.“The one thing I learned in the first administration is to believe him: he says bizarre things, and then he does bizarre things,” she said.She’s cutting back on subscriptions and future travel plans, while stockpiling kitchen staples such as rice, cooking oils, vinegar and flour and replacing worn-out clothes including shoes and jeans, “before inflation hits”.“The supply chain is so globalized that tariffs really hit everything,” Stefanie said.But for Ishaan*, a 51-year-old engineer in Texas, the economic picture means he is abstaining from major purchases.“Everyone I know has started tightening their belts,” he said. “I am cutting out unnecessary expenses, cancelled my gym membership, focusing on savings.”The focus for Ishaan, who fears higher prices and an economic slowdown, is to build up his savings in cash. He feels “scared to invest in any stocks or bonds right now” amid market volatility.Likewise for Jonathan*, a 70-year-old in New Jersey, the financial fallout from Trump’s trade wars means he has been forced to rule out planned purchases and strip consumption back to the essentials.Jonathan said his individual retirement account (IRA) was initially “decimated” – although it ticked up slightly after Trump paused his tariffs on Wednesday. He said it was currently down about 15%.That means cancelling plans to redo the carpet in his house and replace two old televisions, Jonathan said. “In short, we’ll buy only necessities and pay bills until this stupidity ends.”Russ a 35-year-old physicist in New Mexico, said the Trump administration’s policies were “causing me to think about what kinds of spending behavior I could have done without this whole time”.He has an eight-year-old phone and nine-year-old MacBook computer that still work fine, which he will not be replacing. The prospect of runaway price rises for consumer electronics, often from China, have led him to reconsider: “Do I really need this, or do I just want this?“I see these things as being as much toys as necessities,” he said. “Maybe I’ll just go back to a dumbphone or something like that – I fantasize sometimes about not getting all these notifications all the time, like the phones we had back in 2005. But maybe that’s a Luddite fantasy.”Russ said that he was already boycotting Amazon and Target – companies that many feel have aligned themselves with Trump’s agenda such as rolling back their own DEI schemes. He’s trying to shop more at local, independent shops rather than “everything stores”, which he notes is more expensive and time consuming but ultimately worth it.“As an American citizen and registered voter, nobody really cares what you think until November of every other year, you feel kind of voiceless,” he said. “You think, well, if dollars are the only tools we have any more, then damn it, I’m going to cast those votes and allocate my spending accordingly.”View image in fullscreenLikewise, small business owner Christine* said the disruption could cause a wider re-evaluation of US consumer habits.Amid the uncertainty, Christine, 41, stocked up on supplies for her Miami acupuncture business for two years, and bought her son’s fifth birthday present – a bike – early for July. But she said she had already noticed less demand for her work.More broadly, the prospect of inflationary tariffs is accelerating Christine’s reconsideration of how much “stuff” she needs. She’s recently attended “these lovely parties” where friends bring unwanted clothes and they “switch it all around” rather than buying fast fashion.“I really resent being drafted into this mad trade war,” Christine said, “but if there is a silver lining, maybe it’s that at least some people like me will question their unsustainable capitalistic practices.”*Some names have been changed. More

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      Trump’s tariff mess raises the danger of a US default | Lloyd Green

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      “Trump backs down on tariffs, again. And it doesn’t look strategic,” a headline blared on Wednesday afternoon.At the end of trading, equities had recovered a portion of their losses. But plenty of damage had been done. Markets were thrown into turmoil, interest rates jumped and business activity took a hit. Beyond that, the possibility of a recession grew – and the possibility of a default by the US inched up to 6%, according to prediction markets.Meanwhile, Larry Summers, a treasury secretary under Bill Clinton, announced that a recession appeared imminent. “We are being treated by global financial markets like a problematic emerging market,” he posted on X. Also on Wednesday, the Federal Reserve Bank of Atlanta projected first-quarter growth to be negative 2.4%. By extension, tax receipts will probably have shrunk.Less money coming into the treasury’s coffers means that government could breach the debt ceiling sooner than already projected if Congress eventually fails to act. That is bad news for Donald Trump, the Republicans and the country.Before Trump transformed the economy into his personal yo-yo, the government stood poised to default on the nation’s $36tn debt sometime in between mid-July and early October, absent legislation. During the president’s walk on the economic wild side, the odds of a recession grew. Ditto the possibility of a default, a reality of which Trump is acutely aware.With Biden in the White House, Trump urged congressional Republicans to stymie efforts to lift the ceiling. “I say to the Republicans out there – congressmen, senators – if they don’t give you massive cuts, you’re going to have to do a default,” he announced. A default would also mean no social security checks for the US’s seniors.“And I don’t believe they’re going to do a default because I think the Democrats will absolutely cave, will absolutely cave because you don’t want to have that happen. But it’s better than what we’re doing right now because we’re spending money like drunken sailors.”In May 2023, the Biden administration brokered a compromise with the then House speaker, Kevin McCarthy, to increase the debt ceiling but limit spending. The deal came to cost McCarthy his gig as speaker.As president-elect, however, Trump began singing a very different tune. Suddenly debt didn’t matter. In a mid-December telephone interview, Trump urged Congress to scrap the ceiling permanently. “I would support that entirely,” he told NBC News. Apparently, what was sauce for the Democratic goose was not sauce for the Republican gander.“The Democrats have said they want to get rid of it. If they want to get rid of it, I would lead the charge.” Christmas came and went. Republican control of the Senate loomed with the new year.In late December, Trump went on the warpath, albeit to no avail. “The Democrats must be forced to take a vote on this treacherous issue NOW, during the Biden Administration, and not in June,” he thundered. “They should be blamed for this potential disaster, not the Republicans!”Nothing happened.Trump’s hopes for the debt ceiling now rest with the Republican-controlled Congress. Republican budget blueprints envision the ceiling being lifted through reconciliation, a process that bypasses the filibuster in the Senate and instead requires a simple majority vote in each chamber.Whether that happens anytime soon is an open question. Punters peg the chance of a pre-June increase of the debt ceiling at one-in-five. Congress loves procrastinating. Nothing focuses their attention like a crisis.Regardless, Trump’s tariff gambit leaves a pile of economic debris, including the market for US bonds. After his flip-flop on tariffs, Trump suggested that the sell-off in the bond market had forced his hand.skip past newsletter promotionafter newsletter promotion“The bond market is very tricky, I was watching it,” he told the press. “The bond market right now is beautiful. But yeah, I saw last night where people were getting a little queasy.”“Queasy” – more like panicked. Or terrified.Practically speaking, the bond rout means the US government will be forced to pay more to borrow – not an ideal situation while Trump and the GOP push for another round of tax cuts.Regardless, the president’s capitulation reinforced the observation of James Carville, Bill Clinton’s storied political adviser. “I used to think if there was reincarnation, I wanted to come back as the president or the pope or a .400 baseball hitter,” he began.“But now I want to come back as the bond market. You can intimidate everybody,” including Trump.For the moment, the US appears locked in a battle with China, one of the two largest holders of its debt. Don’t believe there is method to Trump’s madness.“We didn’t have access to lawyers … We wrote it up from our hearts, right?” Trump said of his Truth Social post announcing the pause. “It was written from the heart, and I think it was well written too.”Let that sink in. That’s no way to run an airline, let alone a country. On Thursday, markets gave back a chunk of their gains, the dollar sank and gold rose. More

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      In the face of Trump’s mayhem, Europe is the direction to which the UK must turn – and Keir Starmer knows it | Tom Baldwin

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      Keir Starmer was back at the Emirates Stadium on Tuesday to watch Arsenal’s 3-0 win over Real Madrid, a result that far exceeded expectations of his team’s chances in Europe. And, over the next few days, I wouldn’t be surprised if he tries to snatch a short Easter break in the warmth and sunshine of that same continent.Football and family holidays offer him some much needed relief from the grim reality of a faltering economy, towering public debt and terrifying global insecurity, which are all being made worse on a daily – sometimes hourly – basis by Britain’s closest ally of the previous 80 years.But that mayhem being caused by Donald Trump’s extended stag party in the White House means that Europe is much more than an occasional distraction for the prime minister. Slowly, if not always surely, it is once again becoming the direction towards which Britain must turn.This is not exactly where Starmer thought he would to be. For all his talk of an EU “reset”, the plan had been to “make Brexit work” within self-imposed “red lines” ruling out joining the single market or a customs union, blocking freedom of movement and appearing to allow only some minor mitigation of the damage done by Boris Johnson’s deal.In the immediate aftermath of Trump’s inauguration, new horizons on the other side of the Atlantic briefly seemed rather more exciting. There was genuine interest in, if not admiration for, this insurgent disruptor of the US’s stuffy political establishment. There was also a prospect that Britain might gain advantage over the EU from a repurposed special relationship being gilded by inviting Trump to hang out with the royals.And, even now, securing some sort of US trade deal that might save thousands of British jobs, or the promise of the minimal military cooperation needed to maintain European security, are still prizes worth having. It’s silly to blame Starmer for trying to win them, or to expect him to strike poses against Trump for the sake of cheap headlines and not much else.What’s changed, however, is a recognition around the cabinet table that the US president is much more of a problem than part of any solution. Gone are the days when a government source would brief it had more in common with Maga Republicans than US Democrats, or Rachel Reeves could tell Britain to learn from Trump’s optimism and “positivity”. Nowadays ministers say it has become almost futile to anticipate his next move because “he’s only ever reliable in his unpredictability”. Whatever happens next, this is a US administration that can’t be regarded as a stable ally either on the economy or security.Those who think Starmer, in his repeated calls for “cool and calm heads”, is still being excessively polite have perhaps been too busy complaining to have noticed a subtle shift in his language. For instance, when the Times last week ran the headline: “Why Keir Starmer hopes Trump’s tariffs could be good news for the UK”, the rebuttal came from the prime minister himself, with an article in the same newspaper the next day, which began by stating: “Nobody is pretending that tariffs are good news.”View image in fullscreenOne well-placed Downing Street adviser now describes how Trump “wants to destroy the multilateral institutions” that Starmer believes are essential “to span divides and bring the world together”. Another mentions polling evidence that apparently shows even if a big US trade deal can be done, British voters would still prefer closer links to the EU because they don’t trust Trump to deliver.Certainly, efforts to reset those relations have been pursued with more vigour over recent weeks. These began with Starmer’s “coalition of the willing” to replace the military support for Ukraine that Trump appears so intent on taking away, and will continue ahead of the EU-UK summit on 19 May. More focus on shared interests and values and less on “red lines” should mean a security and defence pact is agreed. Also within reach is a so-called veterinary deal to make agricultural trade easier, while legislation is already going through parliament that would enable UK ministers to align with EU regulations in other areas to the benefit of small exporters.There may yet be a workable youth mobility scheme for those aged 18-30, which some EU members, notably Germany, regard as a test of whether this government is really different to the last one. Although the proposal was hastily ruled out during last year’s general election, the Treasury is increasingly sympathetic to it because, by some estimates, it could do more for growth than planning reform and housebuilding combined. At the same time, new cooperation on North Sea windfarms and negotiations to align the UK and EU carbon trading scheme could increase investment, improve energy security and generate billions of pounds in additional revenue.But there are still limits to this revived EU-UK relationship and it will never go far enough or fast enough to satisfy the many Labour supporters convinced that Brexit was a catastrophic mistake. Those close to Starmer emphasise he’s less interested in “relitigating old arguments from the previous decade” than in finding new ways to pursue the national interest now that “the era of globalisation is over”. Downing Street believes that part of the appeal of both Trump and our homegrown strain of rightwing populism lies in how institutions like the EU became too detached from the people they were meant to serve. In short, they’re determined not to be seen defending the status quo.The UK wants any security pact to include data-sharing on illegal immigration, which the EU, for its own arcane reasons, may be unwilling to accept. The government will insist that any defence deal must also allow British industry to bid for contracts from a massive new European rearmament fund. That agreement, in turn, could yet be held up by rows with a French government demanding concessions over fish quotas. The hope is that our political leaders prove big enough to hurdle such obstacles. But economic nationalism is not confined to the White House and making meaningful progress in Europe has never been easy.Though Arsenal’s Champions League victory will have been the high point of Starmer’s week, he may reflect that his team haven’t yet reached the semi-final stage of the competition. In politics, as in football, there is much to play for in Europe, and a long way to go.

      Tom Baldwin is the author of Keir Starmer: The Biography More

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      Trump insists tariff war is ‘doing really well’ as recession fears mount

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      Donald Trump insisted his trade war with much of the world was “doing really well” despite mounting fears of recession and as Beijing hit back and again hiked tariffs on US exports to China.As the US president said his aggressive tariffs strategy was “moving along quickly”, a closely watched economic survey revealed that US consumer expectations for price growth had soared to a four-decade high.The White House maintains that the US economy is on the verge of a “golden age”, however, and that dozens of countries – now facing a US tariff of 10% after Trump shelved plans to impose higher rates until July – are scrambling to make deals.“The phones have been ringing off the hook to make deals,” the press secretary, Karoline Leavitt, told reporters on Friday.Beijing raised Chinese tariffs on US products to 125% on Friday – the latest salvo of its escalating trade dispute with Washington – and accused Trump of “unilateral bullying and coercion”.“Even if the US continues to impose even higher tariffs, it would no longer have any economic significance, and would go down as a joke in the history of world economics,” the Chinese finance ministry said.Few investors were laughing. US government bonds – typically seen as one of the world’s safest financial assets – continued to be sold off, and were on course for their biggest weekly loss since 2019. The dollar also fell against a basket of currencies, and was down against the euro and the pound.Leading stock indices paused for breath on Friday after days of torrid trading. The FTSE 100 rose 0.6% in London. The S&P 500 increased 1.8% and the Dow Jones industrial average gained 1.6% in New York.The S&P 500 finished an extraordinarily volatile week for markets up 5.7%, its biggest weekly gain since November 2023.“We are doing really well on our TARIFF POLICY,” Trump wrote on his Truth Social platform. “Very exciting for America, and the World!!! It is moving along quickly. DJT”Some of Wall Street’s most influential figures were unconvinced. “I think we’re very close, if not in, a recession now,” Larry Fink, CEO of the investment giant BlackRock, told CNBC. Far from providing certainty, the 90-day pause on higher US tariffs on much of the world “means longer, more elevated uncertainty”, he added.Jamie Dimon, CEO of JPMorgan Chase, the US’s largest bank, said the world’s largest economy was facing “considerable turbulence” as a key measure of consumer confidence tumbled to its lowest level since the Covid-19 pandemic – and the second-lowest level on record.US consumer sentiment has dropped 11% to 50.8 this month, ahead the pause announced by Trump earlier this week, according to a regularly survey compiled by the University of Michigan.Expectations for inflation meanwhile surged, with respondents indicating they are bracing for prices to rise by 6.7% over the coming year – the survey’s highest year-ahead inflation expectation reading since 1981.“There is great optimism in this economy,” Leavitt claimed at the White House briefing when asked about the survey. “Trust in President Trump. He knows what he’s doing. This is a proven economic formula.”Trump won back the White House last November by pledging to rapidly bring down prices – something he has claimed, in recent weeks, is already happening. US inflation climbed at an annual rate of 2.4% last month, according to official data.skip past newsletter promotionafter newsletter promotion“Consumers have spiralled from anxious to petrified,” observed Samuel Tombs, chief US economist at Pantheon Macroeconomics. He added, however, that a bipartisan divide – with Democrats growing more pessimistic, while Republicans become more upbeat – suggests that people are allowing their political views to cloud their economic confidence.The US’s top markets watchdog is facing demands from senior Democrats to launch an investigation into alleged insider trading and market manipulation after Trump declared on social media that it was “A GREAT TIME TO BUY!!!” hours before announcing Wednesday’s climbdown on tariffs.Days of erratic policymaking constructed a rollercoaster week for markets, with the S&P 500 dropping 12% in just four sessions, before surging back almost 10% in a single day after the administration pulled back from imposing higher tariffs on most countries, except China, which is facing a 145% tariff on exports to the US.In a letter to the US Securities and Exchange Commission (SEC), Senate Democrats including Elizabeth Warren and Chuck Schumer wrote: “It is unconscionable that as American families are concerned about their financial security during this economic crisis entirely manufactured by the President, insiders may have actively profited from the market volatility and potentially perpetrated financial fraud on the American public.”Tesla meanwhile stopped taking orders in China for two models it previously imported from the US, as companies scramble to adapt to prohibitive tariffs imposed in Trump’s trade war.The manufacturer, run by Trump’s close ally Elon Musk, removed “order now” buttons on its Chinese website for its Model S saloon and Model X sports utility vehicle.Tesla did not give any indication of why it had made the changes but it came after the rapid escalation of the trade war between the US and China.The border taxes make the goods trade between the two countries prohibitively expensive and mean cars imported from the US are now much less attractive in China than those produced locally.In the UK, economists warned that stronger than expected growth of 0.5% in February is likely to prove short lived as the impact of Trump’s trade war is felt throughout the global economy. More