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      in US Politics

      Trump’s tariffs may be perilous for small, heavily indebted countries in global south

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      “This is very messed up. If Trump wants Cambodia to import more American goods: look, we are just a very small country!”Khun Tharo works to promote human rights in the Cambodian garment sector, which employs about 1 million people – many of them women.“I think they are very concerned about their jobs, and I think they are very concerned about their monthly pay cheque. And that has significant effects on the livelihoods of their dependent family,” says Tharo, programme manager at the Centre for Alliance of Labor and Human Rights (CENTRAL), a Cambodian workers’ rights organisation.One of the most wilfully destructive aspects of Donald Trump’s shock and awe trade policy is the imposition of punitive tariffs on developing countries across Asia, including rates of 49% for Cambodia, 37% for Bangladesh, 48% for Laos.For decades Washington had championed economic development through trade. Now, at the same time as slashing overseas aid budgets and retreating from its role in supporting developing nations, it is ripping up that idea entirely.In its place, Trump intends to impose his will on the US’s trading partners. Some are all but powerless to exact concessions, given their small size, and dependence on the mighty American market. Cambodia hastily offered to cut tariffs on US goods on Friday, in a bid to propitiate Washington.Contrary to Trump’s bombast about the US being “pillaged”, the tariffs are not in any sense “reciprocal”.Instead, they relate to the size of the US goods trade deficit with each country, and the value of its exports. (Side note: the 10% paid by the UK has nothing to do with Labour’s negotiating flair – it just came out of the fact that Britain buys about as much stuff from the US as it sells the other way).Ironically, many of the countries in the global south hit by Trump had benefited from preferential schemes offering low or zero tariffs, precisely because building up exporting capacity is an accepted path to development.Alice Oyaro, the chief executive at the charity Transform Trade, which works with producers in some of the worst-hit countries, says: “Our biggest concern is that the additional costs are pushed down to those in the supply chain who are least able to pay. Small farmers exporting everything from green beans to cocoa, and women workers in Bangladeshi factories are already finding it hard to make ends meet. They will see their incomes squeezed even more.”Tiny Sri Lanka, which has an economy 0.3% of the size of the US’s, faces a 44% tariff despite being bailed out by the International Monetary Fund two years ago and continuing to negotiate debt restructuring deals with its creditors.“It’s a highly vulnerable situation,” says Ajith D Perera, the chair of the Asia Pacific Trade Agreement (APTA) Chamber of Commerce and Industry. “Sri Lanka will lose export income and see a hit to GDP and employment – and that comes at a time when it is just coming out of bankruptcy.”He fears the scale of the tariffs could compromise Sri Lanka’s ability to meet the conditions of the IMF bailout deal. Trade is meant to be a key prop for growth, as it rebuilds its shattered economy.“I think the fundamentals have been challenged by the US decision,” he says. “25% of Sri Lanka’s exports go to the US and 70% of that is garments. I think the government needs to start discussions with the IMF immediately.”As his warning suggests, there is a risk that a grim side-effect of Trump’s trade war will be to exacerbate the debt crises already hitting heavily indebted poorer nations.Even countries that have escaped the most punitive tariff rates could still be hit hard if the prospect of a global downturn depresses the value of the commodity exports on which many rely.Keir Starmer and other leaders of the developed world have been preoccupied with their own domestic responses since Wednesday’s bombshell briefing in the White House Rose Garden.But the severity of the probable impact for the global south calls for a concerted approach, too – albeit one that will have to bypassWashington.Most of the hardest-hit countries can already trade tariff-free with major markets under projects such as the EU’s Everything But Arms programme and the UK’s Developing Countries Trading Scheme, which are designed to help the poorest nations to develop through trade.But if Trump’s tariffs stick, multinational brands focused on the US are likely to switch production rapidly to countries hit with lower rates. One garment buyer in India told me on Friday she was already hearing of factory owners in Bangladesh being told by US brands that they would now be manufacturing their sweaters in Peru, which has a rate of just 10%.The social dislocation in some of these hardest-hit economies could be profound, if such rapid shifts result in mass layoffs.And the case for debt write-offs, already clear, may become all the more pressing, if the resulting the looming global downturn sweeps vulnerable countries over the edge.The fact that the British government’s deep cuts to the aid budget now sit alongside a probable global economic downturn and heavy US penalties for exporters in developing countries makes that decision all the more shameful.Back in Cambodia, Tharo says: “The industry right now seems to be in a little bit of a hectic situation. The government is also extremely worried because they are not seeing any alternative markets at the moment. And we don’t have significant goods to be exported to any other country.“Trump doesn’t care,” he sighs. More

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      in US Politics

      American corporations didn’t want to diversify, anyway

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      View image in fullscreenAt Ford Motor Company, the moral stock-taking began with a letter.“This is an extraordinary moment in our history,” Bill Ford, the company’s executive chair, and Jim Hackett, its CEO, wrote to employees on 1 June 2020. It had been three months of upheaval since the coronavirus pandemic began and the company first suspended production at its manufacturing sites. By mid-May, more than 87,000 people in the United States had died from the virus. Then, on 25 May, the video of Derek Chauvin kneeling on George Floyd’s neck for nearly nine minutes, ultimately killing him, was seared into Americans’ consciousness.Even in the midst of a global pandemic, as systemic inequities around healthcare and wealth and education were thrown into sharp relief, the world saw how deadly everyday injustices remained. “All at once, we are grappling with a public health crisis that has claimed hundreds of thousands of lives, an economic shock that has forced us to adapt on the fly, and social upheaval that has challenging all of us to think and act differently,” Ford and Hackett wrote. Globally, people wanted to do something, but they did not know exactly what. There were online gestures: Black squares on Instagram, direct messages of apology to Black friends, well-designed slides with digestible facts about systemic racism. But, as the video spread, millions flooded the streets as well. They rallied in Chicago, Minneapolis, Portland and Washington DC; and they protested overseas in London and Sydney and the Canary Islands. The actions were bolstered by calls to finally address the disparities that made the nation so inequitable.C-suites and boardrooms and universities couldn’t look the other way. Colleges and hospitals began renaming buildings; activists toppled statues and busts of traitors and racists, politicians took down others; and across the country, institutions were pushed to evaluate how their policies had locked certain people out of the American dream. But now, as the Trump administration has brought back to the White House its war against a diversifying workforce, the federal infrastructure and a critical history of the US, corporations are dropping diversity and equity programs as quickly as they created them.How did we get here? Why were so many companies – from Walmart to Paramount to Victoria’s Secret – willing to roll over on their diversity goals after the promises they made in 2020 to uproot systemic racism and transform the nation? Were they all just paying lip service? In many ways, the programs were never intended to radically change the workplace in the first place – they were intended to appease workers and dampen discontent. What we’ve seen since 2020 is not new. It’s a reversal rooted in the policies the US created decades ago, when it cast aside the goal of addressing a legacy of discrimination for the vague idea of diversity – an idea that was always destined to fail, and an idea many corporations never truly believed in.Superficial actionsFor employees at Ford, which was founded in Detroit, where nearly three-quarters of the city’s residents are Black, there was nothing academic about the issues highlighted in 2020. The pandemic hit the city as the plague of racism had left it economically distraught for decades; healing the disease systemic discrimination had left would require effort and intention. “There are no easy answers. We are not interested in superficial actions. This is our moment to lead from the front and fully commit to creating the fair, just and inclusive culture that our employees deserve,” Ford and Hackett wrote.Ford’s first step to healing was a series of conversations with staff to better understand how they felt. They would launch employee resource groups to ensure workers believed they could be their whole selves at the office. “We know that systemic racism still exists despite the progress that has been made,” the Ford executives wrote. “We cannot turn a blind eye to it or accept some sense of ‘order’ that’s based on oppression.”If that sounds familiar, it’s because offices across the country were undergoing similar soul-searching efforts. Within a year of Floyd’s murder, companies had pledged at least $50bn to support racial justice and advance equity and by 2023 that number had jumped to more than $340bn, according to a report by the McKinsey Institute for Black Economic Mobility. Companies such as Apple, Facebook and Pfizer committed to spending externally. Bank of America pledged $15bn to expanding low- and middle-income homeownership; Netflix, PayPal and Nike deposited millions in Black-owned banks; and other companies gave to organizations such as the Equal Justice Initiative. Corporations committed to internal changes, too: they set diversity goals and launched initiatives to try to meet them; they hired chief diversity officers; they held mandatory – if sometimes clumsy – anti-discrimination trainings. Most of these tools had existed in some form before, but amid public outcry, they were pushed to the foreground.The problem was that even when companies actually wanted to help, they often launched their efforts haphazardly. When companies jump to solutions before understanding the desired outcomes, they make rushed decisions, said Eddy Ng, a business professor at Queen’s University in Canada. “Without a clear plan, we go buy more training. People don’t like that,” Ng said. Company leaders had little idea how to fix the structural issues baked into their DNA, so they went with the things that sounded good. “It’s like you go grocery shopping with 100 bucks, but you don’t have a shopping list. You’re going to buy chips and cookies,” Ng told me.Chips and cookies can make a person feel full, they can hold someone over, but eventually there’s a crash – and that person will be left wondering why they have not actually had a full meal; why they are not satisfied. Within weeks, it seemed, companies had built out their diversity, equity and inclusion plans. But not everyone was convinced by them. “Someone like me might say, ‘let’s wait and see if they mean it,’” said Cedric Dawkins, an associate professor of management at York University who studies business ethics. Marginalized communities have felt the sting of America’s empty promises before.Progress in the US is always met with pushback. During Reconstruction, the so-called “Redeemers” – who sought a return of white supremacy – argued that federal support for recently enslaved African Americans was a threat to their liberty. The civil rights movement was immediately met with lawsuits that would limit its desired effects on voting, education and labor. In that context, the only real measure of an organization’s commitment to justice is whether they keep pushing forward with their reforms in spite of any backlash.When corporations launched their plans, they felt like drastic measures, Ng said: “Instead of actually having clear guidelines and goals and outcomes in terms of what they wanted to achieve over the five-year period.” Now, as we come to the end of the five-year period – and companies begin to roll back their diversity efforts, vindicating those who were waiting for the other shoe to drop – one question remains: what was it all for?The backlash beginsOn 6 March 1961, then president John F Kennedy signed executive order 10925 – which created the president’s committee on equal opportunity. “Americans who are members of minority groups have often been unjustly denied the opportunity to work for the government or for government contractors,” Kennedy wrote in his signing statement. He directed the committee to launch a study of government employment practices that would examine the “status of members of minority groups in every department, agency and office of the federal government”. The report would lay down a marker, Kennedy hoped, by which Americans could measure future progress. “I have no doubt that the vigorous enforcement of this order will mean the end of such discrimination.”View image in fullscreenTypically, Kennedy’s order is where histories of affirmative action or race-conscious employment practices begin – after all, it’s the first time the idea of affirmative action as we understand it today emerged. But federal action to address discrimination in the workforce actually stretches back to at least Franklin D Roosevelt’s New Deal, and one New Deal policy in particular: the 1935 Labor Relations Act. The act protected the rights of employees at private companies to better working conditions. If a company engaged in unfair labor practices, employees were “entitled to affirmative action as a remedy to make the employee whole”, said D Caleb Smith, a labor historian at Mount Holyoke College. Those remedies could look like job reinstatement or back-pay. Essentially, the provision was a general remedy to employment discrimination.But the Labor Relations Act was also a mixed bag. The National Urban League and NAACP opposed the legislation because it provided for closed-shop provisions that allowed unions and employers to exclude workers from union membership and apprenticeship programs. Union race discrimination had historically limited Black participation in the workforce: in 1930, for instance, just 3% of the 3,392,800 trade union workers in the US were Black.Still, it was a starting point, and over time, additional protections were added. In May 1943, executive order 9346 reconstituted the fair employment practices committee, which processed 8,000 discrimination complaints in its three years of existence. And in 1947, the Taft-Hartley Act prohibited the closed-shop provision from the New Deal policy. By 1960, however, affirmative action still did not have a formal definition. “It is implied that it’s the intent to improve working conditions to create opportunity for underrepresented minority groups,” Smith said. Kennedy helped provide some unity of definition.Kennedy’s order created one of the earliest affirmative action programs, the Plans for Progress Program, which encouraged companies to develop plans that addressed discrimination and underrepresentation of minorities. Within the first few months, the committee on equal opportunity reported that the program was in full swing. Agencies had begun designating compliance officers and developing training seminars; they had studied best practices for compliance reporting; and they had launched outreach to contractors and the general public. But “the Plans for Progress Program is largely seen as a performative publicity endeavor,” Smith said. It was done in good faith, he added, but it was hampered by the same problems other compliance agencies had: it was understaffed, underfinanced and could not exercise its full authority. For its imperfections, though, “some historians will point to it as a positive that provides companies a model for desegregation and implementing equal employment opportunity,” Smith said.By January 1964, after Kennedy’s assassination, Lyndon Johnson took over the reins and carried out Kennedy’s vision. In a speech to new corporate members of the Plans for Progress program, Johnson announced that it had largely been a success. More than 100 major corporations – representing 6 million workers – had bought into the program, he told those assembled. The ratio of white salaried employees to non-white salaried employees at 91 companies had dipped from 65 to one to 60 to one. “Most significant is the fact that these jobs are not all at the lowest level – Negroes and other minority group Americans are being placed and promoted to positions of responsibility,” Johnson gushed. “This was not accomplished by displacing other workers – rather it was the result of conscious adjustments in personnel practices making merit and ability the only real tests – practices that strengthened the individual companies, and, as a result, strengthen our entire economy.”But some companies and federal contractors began creating measures to subvert the new federal rules, Smith told me. They implemented new tests for employees and had segregated seniority lines – white people occupied positions of power; contrary to the pronouncement, Black people were still often consigned to the lower rungs of industry. After Johnson signed the 1964 Civil Rights Act – and executive order 11246 a year later, which created the office of federal contract compliance to ensure contractors and subcontractors were complying with requirements to “safeguard equal employment” through affirmative action programs – the backlash was almost immediate.White people began claiming the programs were reverse discrimination and sued in federal court over college admissions, hiring and promotion practices. The supreme court upheld certain provisions of affirmative action programs – such as diversity as a compelling interest – but argued that quota systems designed to account for a legacy of discrimination in the US were a bridge too far. The Reagan administration sought to eliminate affirmative action altogether, and was surprised when corporations fought back. Companies such as Merck had begun to believe in their affirmative action policies – a new crop of workers brought new ideas and introduced products to new markets. It was great development philosophically – for those who cared about addressing a legacy of discrimination – and financially, for those who were more ambivalent. As Julian Mark noted in the Washington Post, a survey of 128 Fortune 500 companies revealed that an overwhelming majority, 95%, would keep their affirmative action policies regardless of Reagan’s policy.Reagan was ultimately unsuccessful – in part because he was largely alone in his efforts, even among Republicans. Still, his push to eliminate affirmative action programs led many corporations to settle for policies aimed at promoting a diverse workforce rather than addressing injustice. Such policies, they believed, had less legal exposure. The result was a new crop of watered-down programs that were a far cry from those that preceded them.Some conservatives agreed with Reagan, and as the decade wore on, became a loud contingent of the Republican party. Through the 1980s and the 90s, Republicans began using judicial appointments to transform the federal bench and pursue litigation to reshape civil rights law – warping its meaning. They argued that even watered down affirmative action programs and civil rights measures had gone too far; they wanted them eliminated altogether. Conservatives lionized the leaders of California’s Proposition 209, which banned affirmative action in public education and employment in 1996. The California Civil Rights Initiative “is the beginning of the new civil rights revolution in America; a revolution that promises to unite all America under a banner of hope and freedom”, Gay Hart Gaines, the former president of GOPAC, the Republican donor group, said at the time. Philanthropic organizations such as the Bradley Foundation, Scaife Foundations and Searle Freedom Trust bankrolled challenges to race-conscious admissions at universities and efforts that ultimately gutted the Voting Rights Act. Reagan lost his initial battle, but conservatives saw it as the first shot fired in a longer war – a war they believe, in 2025, is paying off.The capitulationLess than two months after Hackett, the Ford CEO, sent the letter lambasting systemic racism to the company’s employees, he stepped down from his position. Jim Farley, an executive from within, replaced him. In August 2024, ahead of the election, Farley wrote a letter of his own to the staff about diversity, equity and inclusion.“As we work to build an even brighter future, we are mindful that our employees and customers hold a wide range of beliefs, and the external and legal environment related to political and social issues continues to evolve,” Farley wrote. It was a very elaborate way of telling staff that they would be walking back diversity policies because the political winds had shifted. George Floyd’s murder had receded from the national consciousness. The Republican party had seized upon the language of DEI and turned it into a catch-all symbol for the ways the US was diversifying and becoming less tolerant to sexism, racism, ableism and homophobia.The company would no longer comment on “polarizing issues”. Its philanthropic arm’s mission changed from “[providing] access to resources and opportunities that build equity and empower underserved and underrepresented communities to reach their highest potential” to “[partnering] with communities to move people forward and upward”. And Ford would stop contributing to external culture surveys such as the Human Rights Campaign’s Corporate Equality Index. The fresh look at Ford’s policies said nothing – save for vague allusions to the benefits of diversity – about systemic racism. Hackett’s earlier declaration that Ford would not “turn a blind eye” to systemic racism seemed but a memory.Within days of taking office, Donald Trump signed an executive order that would eliminate Johnson’s civil rights order. The order directed the office of federal contract compliance to stop “promoting diversity” and holding contractors responsible for “affirmative action”. To Smith, the administration’s early actions amount to “a blatant effort in order to not only uphold the white power structure, but to remove any government responsibility to uphold the rights of individuals of color, specifically Black people”. It is the fruit of a conservative movement that has been trying to reverse course ever since the government began taking seriously efforts to protect the rights of Americans regardless of race, sex, religion or national origin.In 2020, hundreds of private companies pledged to change their culture – to use their power and influence and, most importantly, money, to re-shape American society toward more just ends. Now, the three largest employers in the nation – Walmart, Amazon and the federal government – have all rolled those policies back. Dozens of other corporations have turned back the clock on even pretending to care about equality in the workplace as well.To businesses’ credit, they had a difficult task ahead of them in 2020. “They’re faced with putting a policy in place quickly that’s responsive and doesn’t sound like lip service to frustrated people,” Dawkins said. But in doing so, they made an admission: they had not been taking diversity seriously before – and the capitulation to the administration’s demands since has betrayed that truth. And they made clear their efforts were always lip service.When corporations pushed back against Ronald Reagan in the 80s, they had the public on their side – and even a significant chunk of the Republican caucus – for at least the valence of effort. Most of the pressure was coming from Reagan himself. But when they felt the united political pressure from conservatives this time around, in the absence of near-universal public support, they had a choice to make.For companies whose values course through everything they do, the choice was easy. As Dawkins, of York University, explained: “A company like Patagonia – which challenged the first Trump administration over environmental regulations – or Ben and Jerry’s, they’ve been in this for the long haul so it doesn’t change as much.” But organizations who opted for expediency – programs to pacify rather than any transformational interrogation of institutional culture and values – capitulated.Values are only as good as their durability under pressure; and many of America’s largest companies proved an equitable, inclusive workplace was never one of their core values to begin with. More

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      Trump tariffs live: Jaguar Land Rover pauses shipments to US as 10% tariff kicks in for UK

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      Trump ally likens BBC host to a ‘kindergartener’ over tariffs before threatening to end interviewJaguar Land Rover will pause shipments of its Britain-made cars to the US for a month in light of president Donald Trump’s tariffs on the UK car industry. The British carmaker said it was suspending shipments while it considers how to mitigate the cost of Mr Trump’s 25 per cent tariff on UK cars. Mr Trump has said the impact of his tariffs plan “won’t be easy” and called for Americans to “hang tough” after a 10 per cent tariff took effect on Saturday. The initial 10 per cent “baseline” tariff, which the UK is subject to, took effect at US seaports, airports and customs warehouses at 12.01am ET (0401 GMT), with higher levies on goods from 57 larger trading partners due to start next week. The UK’s key FTSE-100 stock market suffered its worst one-day drop since the start of the Covid-19 pandemic on Friday, ending a week of havoc on global markets prompted by Mr Trump’s new tariffs war.Sir Keir Starmer will be holding talks with global leaders this weekend as countries consider how to respond.Pictured: Trump goes golfing as world reels from tariffsUS president Donald Trump has gone golfing for the third day in a row as the world reels from his tariffs on global imports.Mr Trump was seen reading a tabloid article with the headline “World War Fee,” and “China: Yeah?” as he arrived at Trump National Golf Club in Jupiter, Florida.Around the same time, Mr Trump posted to his Truth Social platform claiming China would come off worse in the trade war.“China has been hit much harder than the USA, not even close,” he said. “They, and many other nations, have treated us unsustainably badly.“This is an economic revolution, and we will win. Hang tough.” Mr Trump slapped a combined tariff of 54 per cent on Chinese goods earlier this week. Beijing responded by imposing a 34 per cent tariff on US exports to China.Trump reads a tabloid article about China’s response to US tariffs More

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      in US Politics

      Trump’s ‘Liberation Day’ could mean recession in the US and pain worldwide | Steven Greenhouse

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      With the huge and painful tariffs that Donald Trump announced on Thursday, “Tariff Man” is acting like a paranoid 12-year-old bully who is convinced that everyone has wronged him, and he wants revenge. But the president’s instrument of revenge – massive tariffs – is going to do serious damage to the US and global economies. Stock market investors are convinced that’s the case, with Wall Street and world stock markets losing trillions of dollars in value in recent days as a result of Trump’s obsession.The president has escalated his risky, vengeful trade war even though the US economy was in strong shape when he took office – the jobless rate was just 4.1%, inflation was below 3% and US economic growth was the strongest in the industrial world, with its stock market at record levels. So it’s unclear whether the US economy needed the shock treatment that Trump is inflicting. The price increases resulting from his tariffs – which are a tax on imports – will cost the average American family $3,800 a year, according to the Budget Lab at Yale.Trump is right that the number of manufacturing jobs is down substantially from decades ago, and he is intent on getting that number back up. But he’s taking a very high-stakes bet that he can significantly increase the number of factory jobs, even as many economists say the horses have left that barn, and it is too late or will be too painful to do much about it. In 1979, the US had a record 19.5m factory jobs. That number fell to 17m in 2001 and to 12.7m today (having risen by 600,000 during Joe Biden’s presidency).Trump’s new tariffs result from a combination of impulsiveness, impetuousness and ignorance, although some economists say that idiocy and economic illiteracy also play a big part. Paul Krugman says that Trump’s tariffs reflect the “whims of a mad king”, adding that the administration’s case for tariffs is “completely incoherent”, as it insists that the tariffs won’t raise prices but will still raise hundreds of billions of dollars in revenue.The tariffs that Trump announced on Thursday are staggering – 50% on tiny Lesotho, 49% on Cambodia, 46% on Vietnam, 34% on China, 32% on Taiwan, 24% on Japan and 20% on European Union countries. These percentages were arrived at not by careful, probing analysis that took months, but by some slapdash, Keystone Kops math.It would be generous to say it’s the one-eyed leading the blind. Rather, it’s an economically blind, impetuous president leading a mum, intimidated Republican-controlled Congress. One of the tragedies here is that many congressional Republicans see the grievous damage Trump is doing, but they’re too craven to speak out and risk Trump’s and Elon Musk’s social media wrath.Mark Zandi, the chief economist at Moody’s Analytics, is predicting disaster. He says that as a result of Trump’s tariffs a recession “will hit imminently and extend until next year”. Zandi says that economic growth could fall by 2 percentage points, while the jobless rate could leap to a very painful 7.5%. On Friday, the Federal Reserve chair, Jerome Powell, also sounded the alarm, saying that Trump’s tariffs could cause even slower economic growth and higher inflation than originally expected.With Trump’s 50% tariff rate on Lesotho, 46% on Vietnam and 37% on Bangladesh, those countries – with their export-dependent apparel industries – will suffer terribly. There will be huge layoffs and no doubt an increase in hunger and immiseration – just as Trump-Musk’s tremendous foreign aid cuts at USAID have already resulted in increased hunger and deaths. And one has to wonder: by pummeling poor, apparel-producing countries such as Lesotho, Cambodia, Vietnam and Bangladesh, what is Trump trying to achieve? Does he want to bring back to the US low-paying, garment-industry jobs making jeans and sneakers?Carefully crafted tariffs can be helpful. They can be used to help build important industries or prevent the wholesale destruction of industries due to other countries’ bad behavior, like China’s improperly subsidizing its industries or dumping goods on the world market far below the cost of production. Unfortunately, Trump’s so-called “liberation day” tariffs are not a scalpel designed to help specific industries, but rather a blunderbuss mess, hitting everyone and everything, including US consumers and industries. Let’s not forget that the tariffs will raise costs at many US manufacturers and make them less competitive by, for instance, greatly increasing the price of imported steel and auto parts.The tariffs that Trump is imposing are even greater than the infamous Smoot-Hawley tariffs, which are widely seen as having worsened the Great Depression. Krugman noted that Trump’s tariffs could also do serious damage because “imports as a share of the [US] economy are three times what they were in the 1920s”.Even if Trump’s tariffs were to do what he hopes – create another million or two factory jobs – the cost would be immense. A recession. Millions of families hurt by higher prices. Trillions and trillions in lost stock market value. Far worse relations with our close allies and other countries. Opening the door to Trump’s adversary, China, significantly improving its trade and economic relations with other countries. Plus, a severe economic shock to many poorer nations.And it’s not at all certain that Trump’s tariffs will create a million or more manufacturing jobs: US economic growth and jobs will be hurt by a possible tariff-induced recession, trade retaliation from other countries, a long-term loss of markets as traditional trading partners turn away from the US, and a possible long-term decline in US industrial competitiveness as tariff protections enable inefficient companies to succeed.skip past newsletter promotionafter newsletter promotionTrump’s big hope is that corporations will build new factories and create more factory jobs in the US, but corporate executives won’t do that unless they’re convinced that there’s economic stability and predictability. They’re not blind to how capricious and unpredictable Trump is, and they know that he loves to play master dealmaker and win concessions from other countries and then immediately slash their tariffs. Trump’s team says these tariffs will be here for the long haul, but can corporate CEOs count on those claims when they’re deciding to spend $400m on a new factory?In announcing his huge new tariffs last Thursday, Trump proclaimed: “April 2, 2025 will forever be remembered as the day American industry was reborn, the day America’s destiny was reclaimed, and the day that we began to make America wealthy again.” As usual, Trump failed to note some extremely important things.Although he won’t admit it, the US is already very wealthy. If he were truly serious about fixing the economy and making it fairer, he wouldn’t be rushing to give massive tax cuts to the ultra-rich and sparking fears of vast cuts Medicaid and food stamps that struggling American families rely on.What Trump and his team will never admit is that 2 April 2025 may for ever be remembered as the day the US economy took a grievous, Trump-induced tumble toward recession and higher prices. And not that Trump cares, but 2 April 2025 may also be remembered overseas for creating tremendous pain for struggling workers from Bangladesh to Lesotho to Honduras.

      Steven Greenhouse is a journalist and author focusing on labor and the workplace, as well as economic and legal issues More

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      in US Politics

      Trump extends deadline for TikTok sale to non-Chinese buyer to avoid ban

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      Donald Trump said he will sign an executive order to extend the TikTok ban deadline. This is the second time the president will have delayed the ban or sale of the social media app, and will punt the deadline to 75 days from now.The TikTok deal “requires more work to ensure all necessary approvals are signed”, Trump announced on his Truth Social platform on Friday.ByteDance, TikTok’s parent company, issued a statement in response to the executive order: “ByteDance has been in discussion with the U.S. Government regarding a potential solution for TikTok U.S. An agreement has not been executed. There are key matters to be resolved. Any agreement will be subject to approval under Chinese law.”Congress passed a law last year forcing TikTok to either divest or sell its assets in the US. The law stemmed from concerns that the app’s Chinese owner, ByteDance, could use the social media platform to manipulate Americans. The first deadline to ban or force the sale of the app was 19 January. But, on his first day in office, Trump signed an executive order to delay that decision to 5 April. Now the new deadline will be in mid-June.Earlier this week, the president met with potential buyers for TikTok and said his administration is “very close” to a deal. Among those who’ve reportedly thrown in bids are a consortium of investors led by the software giant Oracle, asset manager Blackstone, Amazon, Walmart, billionaire Frank McCourt, a crypto foundation, and the founder of the adult website OnlyFans.TikTok is a tremendously popular social media app with 170 million users in the US. Investors and corporations see huge appeal with owning the app and its secretive algorithm.ByteDance has said it has no plans to sell TikTok and in previous court filings said a divestiture “is simply not possible: not commercially, not technologically, not legally”.After announcing sweeping tariffs on dozens of countries, Trump hinted on Thursday aboard Air Force One that he might lessen the trade penalties on China if ByteDance were to approve a sale. The country faces a 54% tariff on goods imported to the US. “We have a situation with TikTok where China will probably say we’ll approve a deal, but will you do something on the tariffs. The tariffs give us great power to negotiate,” he said.In his Truth Social post Friday, Trump reiterated that sentiment, saying: “We hope to continue working in Good Faith with China, who I understand are not very happy about our Reciprocal Tariffs (Necessary for Fair and Balanced Trade between China and the U.S.A.!).skip past newsletter promotionafter newsletter promotion“We do not want TikTok to ‘go dark,’” he continued. “We look forward to working with TikTok and China to close the Deal. Thank you for your attention to this matter!” More

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      in UK Politics

      Global trade war intensifies and shares tumble as China hits back at Trump tariffs

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      Share prices tumbled around the world on Friday – with Britain’s FTSE 100 suffering its worst drop since the start of the Covid-19 pandemic – as the global trade war intensified with China’s retaliatory imposition of a 34 per cent tariff on imports of all US products.Trillions of dollars have been wiped from the markets since Donald Trump announced a range of import taxes on goods from other countries. British exports to the US face a blanket 10 per cent levy. Sir Keir Starmer is due to hold talks with world leaders over the weekend, as nations reel from the economic hit and decide whether to reciprocate with tariffs on Washington. The prime minister was yesterday urged not to retaliate by his predecessor Sir Tony Blair, who said that such a move would not be in the UK’s “best interests”.Economists warn that escalating the situation could generate a spike in inflation and weaken growth, even triggering recession.The collapse in share values creates a big dent in many British pension funds, and there are fears that China will respond to the US tariffs by flooding other countries with cheap exports, further harming British firms. Wall Street saw a second day of bruising losses on Friday, while London’s top stock market fell 4.95 per cent to a five-year low – its biggest single-day decline since March 2020.Downing Street rejected Mr Trump’s claim that the British government is “happy” about the 10 per cent rate, which is half of the 20 per cent levy being imposed on European Union members, and much lower than the rate imposed on many other nations.Aboard Air Force One, Trump told reporters he had had a “very good dialogue” with Sir Keir, adding: “I think he was very happy about how we treated them with tariffs.”But a spokesperson for No 10 was clear, saying “We are disappointed” – and added: “We’ll be engaging with international leaders over the weekend… It is a changing, shifting global economic landscape.”Analysts for AJ Bell estimate that about £3.8 trillion has been wiped off the value of the global stock market since Mr Trump’s announcement, which he billed as “Liberation Day” for the US economy.“It caps off a horrible week for financial markets and dragged share prices even lower,” said Dan Coatsworth, an investment analyst at AJ Bell. “It’s also bad for the world in general, as we now have a repeat of the heightened geopolitical tensions between the US and China that dominated Trump’s first term.” Mr Coatsworth added that the president’s “tactics have caused shockwaves in every corner of the world”.As well as share prices, the value of the US dollar and even gold fell on Friday.US Federal Reserve chair Jerome Powell described the tariffs, along with their likely economic and inflationary impacts, as “significantly larger than expected” and said they were “highly likely” to lead to “at least a temporary rise in inflation” in the US.In the stand-off between the US and China, Beijing imposed reciprocal tariffs and announced controls on exports of medium and heavy rare-earths, including samarium, gadolinium, terbium, dysprosium, lutetium, scandium and yttrium, to the US.In Japan, prime minister Shigeru Ishiba said Mr Trump’s tariffs had created a “national crisis” as a plunge in banking shares set Tokyo’s stock market on course for its worst week in years.Investment bank JPMorgan said it now believes there is a 60 per cent chance of the global economy entering recession by the end of the year, up from 40 per cent previously.EU trade commissioner Maros Sefcovic said he would speak to his US counterparts before responding.“The EU will respond in a calm, carefully phased, and above all, unified way, as we calibrate our response,” he said on social media. “We will not shoot from the hip.”The prime minister has said he is reluctant to make a quick decision on tariffs.In the House of Commons this week, Liberal Democrat leader Sir Ed Davey urged the prime minister to team up with European and Commonwealth countries to “stand against Trump’s tariffs and for free trade”.Sir Keir replied: “I really do think it is not sensible to say the first response should be to jump into a trade war with the US.” More

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      in US Politics

      Trump insists he won’t back down from global trade war as markets slump

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      Donald Trump doubled down on his decision to launch a global trade war, declaring that he would “never” back off from sweeping tariffs on US trading partners.The US president’s announced action sent shock waves around the world this week, prompting fierce threats of retaliation and sharp sell-offs in stock markets.In an all-caps message on his Truth Social social media platform, Trump sought to convey his defiance in the wake of news that Beijing is preparing to hit back with 34% tariffs of its own.“TO THE MANY INVESTORS COMING INTO THE UNITED STATES AND INVESTING MASSIVE AMOUNTS OF MONEY, MY POLICIES WILL NEVER CHANGE,” he claimed. “THIS IS A GREAT TIME TO GET RICH, RICHER THAN EVER BEFORE!!!”Within hours, however, the president was indicating that he might be prepared to change course. “Just had a very productive call with To Lam, General Secretary of the Communist Party of Vietnam, who told me that Vietnam wants to cut their Tariffs down to ZERO if they are able to make an agreement with the U.S.,” Trump wrote on Truth Social, adding that he looked forward to a meeting “in the near future”.The comments came as markets tumbled for the second straight day after Trump’s move to bring in tariffs on scores of countries. He claims the policy – a blanket 10% tariff from Saturday, with higher rates for specific markets from next week – will bring US manufacturing jobs back to the US and raise trillions of dollars for the federal government. Many economists have cautioned it will trigger economic chaos, and likely raise prices.The International Monetary Fund (IMF) has warned that the move may well knock the global economy. Kristalina Georgieva, its managing director, , said: “We are still assessing the macroeconomic implications of the announced tariff measures, but they clearly represent a significant risk to the global outlook at a time of sluggish growth.”Shortly before Wall Street opened on Friday, Trump claimed China had “panicked” by announcing new retaliatory tariffs on US imports. “CHINA PLAYED IT WRONG, THEY PANICKED – THE ONE THING THEY CANNOT AFFORD TO DO!” he wrote on Truth Social.China’s industry associations have unanimously condemned the tariffs. The country’s National Textile and Apparel Council said it “supported the government’s forceful measures” and that the US had “damaged the resilience of the global textile industry’s supply chain”.The S&P 500 fell 4.4% in early trading, exacerbating a decline that began in February. The index, which tracks 500 of the leading US companies, is now down almost 14% from its peak.Shares in the US bank sector had fallen nearly 6% on Friday, reflecting fears that the trade war could trigger a recession. It could also be an indicator that investors are expecting faster interest rate cuts by the US Federal Reserve, in order to instigate growth.Crude oil prices also plunged by 8% on Friday, heading for their lowest point since the middle of the pandemic in 2021.Trump personally selected the controversial formula for determining what tariffs would be imposed on specific countries from a menu of options, according to the Washington Post.skip past newsletter promotionafter newsletter promotionThe chosen formula was based on two simple variables: the trade deficit with each country and the total value of its US exports.Several Trump aides had apparently been working on crafting country-specific tariffs for weeks, taking into account a broad range of tariff & non-tariff barriers. Sources told the Post that more sophisticated approaches had been developed.Trump reportedly didn’t decide on the final plan until around 1pm Wednesday – less than three hours ahead of his Rose Garden address announcing the tariffs. It is unclear who authored the formula Trump ultimately picked.The US secretary of state, Marco Rubio, told reporters that the markets “will adjust” to the sweeping tariffs imposed by Trump. “The markets are reacting to a dramatic change in the global order in terms of trade … As long as they know what the rules are going to be moving forward … the markets will adjust.”Many Democrats have expressed frustration with the early impacts of the tariffs on the US economy. JB Pritzker, the governor of Illinois, wrote on X: “The biggest tax hike in American history. Donald Trump’s tariffs are throwing the economy into the tank.”California senator Alex Padilla wrote: “I’m not enraged by the stock market crashing because I’m sympathetic towards traders on Wall Street. I’m mad because this hurts the pensions and retirement savings of so many Americans. And Trump couldn’t care less.” More

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      in US Politics

      The Guardian view on Donald Trump’s tariff ultimatum: tribute for access to America’s empire | Editorial

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      When Donald Trump stood before union auto workers in the Rose Garden he declared “Liberation Day”, promising to stand up for Main Street. Whether that pledge will be fulfilled is moot. He will declare victory either way. What the US president offered was not just an economic programme, but an imperial one.Mr Trump’s logic, if it exists, lies in the 397-page report on “foreign trade barriers” he brandished on Wednesday. Its message is brutally simple: you may sell your goods to Walmart shoppers, but only if you let US cloud services hoover up your data, US media flood your screens and US tech monopolies operate on their terms – not yours. TikTok is the test case for Trump’s platform nationalism: only US firms may mine data, reap profits and rule the digital empire.A one-week ultimatum and a fabricated national emergency lay bare the theatrics driving Mr Trump’s agenda. The US president’s proposed tariffs and economic nationalism are not about correcting trade imbalances; they are about coercing others into accepting American economic dominance – without requiring the US to sacrifice its domestic advantage.The US continues to run goods deficits not because it “borrows” from abroad, but because the rest of the world willingly exchanges real goods for dollars it cannot issue. Mr Trump demands tribute for that privilege: control over digital infrastructure, forced access for hi-tech rentiers and suppression of rival technologies. The realpolitik is that you can sell to American consumers – but only if you buy into American rules, platforms and financial dependencies. Though Mr Trump’s foreign policy is transactional, its domestic effect will probably be transformative – and not in a good way. Tariffs raise prices for everyone, especially the poor, while shielding local producers from competition. Meanwhile, as Mr Trump made clear, the revenues are earmarked not for public investment or industrial policy, but for tax cuts that benefit the wealthy. In this regime, tariffs redistribute upward: the poor pay more, so billionaires pay less.This is not so much anti-globalist as post-globalist. It seeks not withdrawal from the world, but a world that submits to new terms. The US empire still earns – but now demands more and spends less. Foreign aid is slashed and multilateral rules are replaced by bilateral bargains struck at speed. If allies want to trade, they must also license Google Cloud services, buy Boeing jets and resist Chinese influence. Trade, technology and security are bundled into a single, rent-seeking foreign policy.Markets, however, are less convinced – and their continued crashing reflects not just recession fears, but a dawning recognition that this model is not a one-quarter adjustment. It is a paradigm shift. The pain, even Mr Trump concedes, may be real. But for him, pain is purgative. It disciplines labour, justifies austerity and remakes the economy in the image of the deal.China’s retaliatory tariffs raise the prospect of a dangerous trade war. But Beijing is signalling that if it can’t win in the US-led system, it will build its own. For other major economies, including the UK, the task is not to replicate American leverage, but to reduce dependence on it – by deepening regional integration, investing in technological autonomy and limiting exposure to US-controlled chokepoints in finance, tech and defence. Resistance may provoke retaliation, but submission ensures subordination. In the long run, strategic cooperation – not bilateral concession – is the only durable answer to tariff imperialism. More