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    Global markets in turmoil as Trump tariffs wipe $2.5tn off Wall Street

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    Global financial markets have been plunged into turmoil as Donald Trump’s escalating trade war knocked trillions of dollars off the value of the world’s biggest companies and heightened fears of a US recession.As world leaders reacted to the US president’s “liberation day” tariff policies demolishing the international trading order, about $2.5tn (£1.9tn) was wiped off Wall Street and share prices in other financial centres across the globe.Experts said Trump’s sweeping border taxes of between 10% and 50% on the US’s traditional allies and enemies alike had dramatically added to the risk of a steep global downturn and a recession in the world’s biggest economy.World leaders from Brussels to Beijing rounded on Trump. China condemned “unilateral bullying” practices and the EU said it was drawing up countermeasures.While Trump timed his Wednesday evening Rose Garden address to avoid live tickers of crashing stock markets, that fate arrived when Asian exchanges opened hours later.Drawing comparisons with the market crashes at the height of the coronavirus pandemic and the 2008 financial collapse, the sell-off swept the globe, sending exchanges plunging in Asia and Europe. The UK’s FTSE 100 index of blue-chip companies closed the day down 133 points, or 1.5%, to 8,474 after suffering its worst day since August.All three main US stock markets were down at the end of trading in their worst day since June 2020, during the Covid pandemic. The tech-heavy Nasdaq fell 5.97%, while the S&P 500 and the Dow dropped 4.8% and 3.9%, respectively. Apple and Nvidia, two of the US’s largest companies by market value, lost a combined $470bn in value by midday.Libby Cantrill, the head of US public policy at Pimco, one of the world’s largest bond fund managers, said investors were growing increasingly concerned as Trump appeared to be unwilling to soften his stance in the face of market turmoil, although hope remained that he would ultimately strike deals with US trading partners.“There is likely a limit to how much pain he and his administration are willing to endure in order to rebalance the economy, but when that is or what that looks like remains to be seen,” she said.“For now, we should assume that his pain tolerance is pretty high and that tariffs stick around for a while.”The US dollar hit a six-month low, falling 2.2% on Thursday morning, amid a growing loss of confidence in a currency previously considered the safest in the world for most of the past century.Warning clients to beware a “dollar confidence crisis”, George Saravelos, the head of foreign exchange research at Deutsche Bank, said: “The safe-haven properties of the dollar are being eroded.”The heaviest falls in share prices on Thursday were reserved for US companies with complex international supply chains stretching into the countries that Trump is targeting with billions of dollars in fresh border taxes.Apple, which makes most of its iPhones, tablets and other devices for the US market in China, was down 9.5% at close of trading, and there were steep declines for other large multinationals including Microsoft, Nvidia, Dell and HP.Commodities fell sharply, including a 7% plunge in oil prices, reflecting growing concerns over the global economic outlook.Speaking to reporters on Thursday, Trump said: “I think it’s going very well. It was an operation like when a patient gets operated on and it’s a big thing. I said this would be exactly the way it is … We’ve never seen anything like it. The markets are going to boom. The stock is going to boom. The country is going to boom.”Trump later said: “Every country is calling us. That’s the beauty of what we do. If we would have asked these countries to do us a favour they would have said no. Now they will do anything for us.”skip past newsletter promotionafter newsletter promotionOver the last nearly 24 hours, Trump has faced widespread backlash from US lawmakers and global leaders over his tariffs plan, with the senior Republican senator Mitch McConnell calling it “bad policy” while Canada – a traditional American ally – called the tariffs “unjustified” and “unwanted”.Tariffs will fall heavily on some of the world’s poorest countries, with nations in south-east Asia, including Myanmar, among the most affected.Cambodia, where about one in five of the population live below the poverty line, was the worst-hit country in the region with a tariff rate of 49%. Vietnam faces 46% tariffs and Myanmar, reeling from a devastating earthquake and years of civil war after a 2021 military coup, was hit with 44%.Analysts warned that garment and sports shoe makers, which rely heavily on production in south-east Asia, face rising costs, which will push up prices for consumers around the globe. The share prices of Nike, Adidas and Puma all fell steeply.Analysts said Trump’s measures would raise the average tariff, or border tax, charged by the US to the highest level since 1933, in a development that threatened to sink the US into recession while increasing living costs for consumers.Trump’s plans involve imposing a 10% tariff on all US trading partners from just after midnight on 5 April, before additional higher tariffs of up to 50% are imposed on countries including China, Vietnam and the EU.The non-partisan Tax Foundation thinktank said it estimated the plan would represent a “$1.8tn tax hike” for US consumers, which would cause imports to fall by more than a quarter, or $900bn, in 2025.While the measures will hit the US hard, researchers at the consultancy Oxford Economics said they could sink global economic growth to the lowest annual rate since the 2008 financial crisis, barring the height of the Covid pandemic.Countries scrambled to assess the fallout and whether to retaliate. The UK, which was hit with the lowest level of 10% tariffs, suggested it may retaliate even as it tries to strike a deal with Washington.It published a 417-page list of US products on which it could impose tariffs, including meat, fish and dairy products, whiskey and rum, clothing, motorcycles and musical instruments.The business secretary, Jonathan Reynolds, told MPs that ministers were still pursuing an economic deal with the US as the priority but “we do reserve the right to take any action we deem necessary if a deal is not secured”.The French president, Emmanuel Macron, said Trump’s decision to impose tariffs of 20% on EU goods was “brutal and unfounded”, while Germany’s outgoing chancellor, Olaf Scholz, called it “fundamentally wrong”.Spain’s prime minister, Pedro Sánchez, said the “protectionist” tariffs ran “contrary to the interests of millions of citizens on this side of the Atlantic and in the US”.The EU is thought to be preparing retaliatory tariffs on US consumer and industrial goods – likely to include emblematic products such as orange juice, blue jeans and Harley-Davidson motorbikes – to be announced in mid-April, in response to steel and aluminium tariffs previously announced by Trump. 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      Donald Trump builds a wall made of tariffs, enclosing the whole US

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      Donald Trump is finally making good on his campaign promises to “build that wall” – but instead of steel fencing along the Mexican border, it will be constructed from tariffs, and will enclose the entire United States.In his pugnacious and typically rambling speech on the White House lawn on Wednesday, Trump set out plans for across-the-board import taxes, ranging from 10% to more than 40%.The president promised “liberation”, yet the immediate impact is more likely to be rising prices for US shoppers and corrosive uncertainty for firms, exacerbating an economic slowdown that may already be under way.Outside the wall, countries will be affected according to how dependent their economies are on exports to the US – and how exposed they are to the global trading system. For some, it is likely to be devastating.The UK will be relieved to be slapped with “only” the 10% minimum, after Keir Starmer’s charm offensive, and the EU may have feared worse than 20%. But for some countries Trump outlined much higher rates: 46% for Vietnam, 49% for Cambodia and 29% for Pakistan, for example.The precise effects of sweeping tariffs on this historic scale are very hard to predict. One factor is how rival economies will respond – with retaliatory tariffs tending to make a bad situation worse, though they may make short-term political sense (see Mark Carney’s poll ratings in Canada).Another question is whether the dollar may appreciate, somewhat softening the blow for US importers. That may limit the pass-through to prices, which would otherwise be expected to rise as the cost of importing products and materials increases.The main challenge in assessing the exact impact of the plans, though, is that Trump’s statement did not mark the end of the period of profound economic uncertainty that began when he arrived in the White House – quite the opposite.Instead, he has fired the starting gun on a new and inherently unpredictable scramble, in which governments will fire back with their own punitive tariffs – at the same time as negotiating hard to try to secure exemptions.As in the UK, where ministers hope to secure an “economic agreement”, which appears to involve sweeteners for US big tech and lower tariffs on food imports, these talks are likely to have economic consequences of their own.And it remains unclear, to say the least, how amenable Trump is likely to be to persuasion. On one hand, he appears to enjoy the theatre of using tariffs to exact policy concessions, which he can then portray as a winning deal.Trump-watchers have also sometimes argued that a dramatic slide in stock prices might lead the president to pull back from the harshest version of the policy.His press secretary, Karoline Leavitt, insisted on Tuesday that “Wall Street will be just fine” as a result of the tariff package.But in other moments, Trump has appeared to suggest a bit of market turbulence might be part of the plan.“There is a period of transition, because what we’re doing is very big,” he said in a recent Fox News interview – in which he also declined to rule out a recession.There is also the small matter of the revenues the administration hopes to raise from tariffs, which it wants to use to fund tax cuts.White House trade adviser Peter Navarro has suggested the levies could raise an extraordinary $600bn (£460bn) a year: hardly consistent with offering carve-outs to every major economy that comes knocking.Caving in would also undermine another of Trump’s sometimes-contradictory aims: persuading firms to create new manufacturing jobs, inside the shelter of the tariff wall.As bewildered trade experts repeatedly said in the run-up to what Trump has called “liberation day”, and are likely to continue to say after Trump’s outing in the Rose Garden, guessing what happens next is all but impossible.All this makes for an alarming level of uncertainty – and what economists are very clear about is that consumers and businesses hate that.Consumer confidence measures in the US have already been sliding sharply. Alongside weeks of headlines about the ambiguous tariff plans, the tens of thousands of abrupt government job losses made by Elon Musk’s Department of Government Efficiency (Doge) seem unlikely to have helped the mood.And in boardrooms, baffled executives may be extremely reluctant to press ahead with significant investments – bringing manufacturing back into the US as Trump hopes, for example – when it is unclear how long the tariffs will endure.Whatever the medium-term prospects of “jobs and factories” coming “roaring back” to the US, as Trump predicted, for now what some had already dubbed a “Trumpcession” appears significantly more likely to happen, than the “golden age” he has promised. More

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      What is ‘abundance’ liberalism, and why are people arguing about it?

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      Is progressive public policy in America broken? Do many left-leaning laws actually make life more expensive for struggling people? Is regulatory red tape hindering growth and innovation? Have Democratic-run cities, such as New York and San Francisco, become giant billboards against liberal governance?These arguments wouldn’t sound out of place in a policy paper from a conservative thinktank. Yet their newest champions are two of America’s best-known left-leaning journalists, the New York Times’ Ezra Klein and the Atlantic’s Derek Thompson – and they believe the left is overdue for a reckoning of sorts.Klein and Thompson make their case in a new book simply called, with no subtitle, Abundance. The authors put forward a positive pitch for “abundance liberalism”: a vision of the US where policymakers spend less time fighting over how to apportion scarce resources and more time making sure there’s no scarcity to start with.View image in fullscreenAbundance has received a mostly positive reception so far, but also sparked debate, with critics arguing that the book ignores the effect of corporate power, downplays Republicans’ role in the crises that the US faces or overstates the effectiveness of its policy prescriptions. A writer in the left-leaning magazine American Prospect accused the “abundance agenda” of being “neoliberalism repackaged for a post-neoliberal world”.The book opens with a striking image of a US, in the year 2050, that is close to utopia. Americans’ electrical needs are powered by sustainable energy “so clean it barely leaves a carbon trace and so cheap you can scarcely find it on your monthly bill”. AI breakthroughs, labor rights and economic reforms mean that most people can do their jobs in a shorter workweek. Vertical farms provide cheap and fresh vegetables, desalinated water from the ocean is used as drinking water, and lab-grown meat has replaced animal slaughter.This near-future America – less the gritty neon smog of Blade Runner than a hi-tech Copenhagen – is entirely achievable, the authors argue. It just requires political vision and a willingness to reconsider certain assumptions.Despite being the richest country in the world, the US has a problem of scarcity, particularly in Democratic-run metropolitan areas, where the costs of housing and other basic needs have spiraled out of control. This is exacerbated by the traditional progressive solution of giving people money or vouchers to help them pay for finite resources such as housing, healthcare and food, the book argues, which increases demand and merely makes those things even more expensive.“The problem is that if you subsidize the cost of something that there isn’t enough of, you’ll raise prices or force rationing,” Klein has said. He and Thompson have described themselves as “supply-side” progressives, borrowing a term usually associated with conservative economic theories.What the US badly needs to do is build, they argue – build more houses, public transportation, power plants and other infrastructure – but that isn’t happening.One obstacle is nimbyism, the tendency of people to support public works and development in the abstract but fight them when they affect their own neighborhoods. Another is “everything bagel” logrolling that complicates what should be narrowly focused legislation by layering it with other social and political objectives, such as diverse hiring requirements or climate crisis goals, in order to appease interest groups or political constituencies.In an example Thompson recently discussed on a podcast, then president Joe Biden signed legislation in 2021 providing $42bn of funding to expand access to broadband internet in rural America. As of this December, according to Politico, the program had “yet to connect a single household”. Critics told Politico that this was partly because of a “suite of federal conditions” that required states “accepting the money to make sure providers plan for climate change, reach out to unionized workforces and hire locally”, as well as guarantee affordable broadband plans for people with low incomes.“I don’t want the state of Virginia taking, say, federal money to build broadband internet and then charging poor rural folks, like, $200 a month to go online,” Thompson said. “But by holding those values so closely … we accidentally built just about nothing.” A “confusion of process versus outcomes” meant that “very little was actually done on behalf of the Americans for whom we wanted to raise their living standards”.Another example is California, which in 1982 began studying the idea of implementing a high-speed rail system across the state. The idea was, and is, extremely popular with voters, and billions of dollars were budgeted for the project. Four decades later, almost none of it has been built. A “vetocracy” of regulatory, legal, environmental and political considerations have caused endless delays and continually narrowed the project’s ambition.“In the time California has spent failing to complete its 500-mile high-speed rail system,” Thompson and Klein write, “China has built more than 23,000 miles of high-speed rail.”The solution to these problems, Abundance argues, is a combination of techno-optimism, ambitious and clearly defined policy goals, and political leadership that is willing at times to say no to progressive pressure groups.Klein and Thompson favorably cite what happened when a bridge collapsed in Pennsylvania in 2023, crippling an essential highway. To fix it would typically take months of planning, consultation and reviews; Governor Josh Shapiro instead declared a state of emergency that allowed the reconstruction of the bridge with union labor but free from many normal processes. The highway reopened in 12 days, instead of the 12 to 24 months that it might have taken.Abundance makes clear that it is a book written for the left, and isn’t really interested in elaborating the ways that Republicans and conservatives have contributed to these problems, though Klein and Thompson acknowledge that they have. Yet within the left the book has proved controversial.“[I]t would be a huge mistake,” Matt Bruenig, a policy analyst, wrote in Jacobin, “to sideline whatever focus there is on welfare state expansion and economic egalitarianism in favor of a focus on administrative burdens in construction.”He continued: “Indeed, we have now seen what it looks like when the government supports and subsidizes technological innovation and implementation without concerning itself with the inegalitarianism of the system. His name is Elon Musk. In its desire to promote electrical vehicles and rocketry innovations, the US government made him the richest man in the world and then he used his riches to take over a major political communications platform and then the government.”While agreeing with some of Abundance’s aims, the journalists Paul Glastris and Nate Weisberg, writing in the Washington Monthly, argued that the book’s prescriptions wouldn’t necessarily bring the kind of sweeping changes that Klein and Thompson believe. For example, according to examples they cite, areas of the US that have reformed zoning laws to make it easier to build apartment buildings and multifamily homes have seen only modest reductions in the cost of housing.Thompson and Klein have argued that the abundance agenda is bigger than any individual policy proposal, and more about the Democratic party and other left-leaning institutions rethinking their own ambitions and how they conceive of success and failure.“Liberals should be able to say: Vote for us, and we will govern the country the way we govern California!” they write. “Instead, conservatives are able to say: Vote for them, and they will govern the country the way they govern California! … What has gone wrong?” More

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      The Guardian view on Starmer’s aid cuts: they won’t buy security, but they will undermine it | Editorial

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      Politics is about choices. Some are forced on governments by circumstance. Others are self‑imposed. Labour’s decision to cut the aid budget to “pay” for increased defence spending is firmly in the latter category. It is also wrong – forcing the world’s poor to pay for Britain’s safety. This is a false economy. Cutting aid will make the world more unstable, not less. The very crises that fuel conflict – poverty, failed states, climate disasters and mass displacement – will only worsen with less development funding. Labour’s logic is self‑defeating: diverting money from aid to defence does not buy security; it undermines it.The numbers tell the story. Despite government attempts to inflate the amounts involved, the extra £5bn‑£6bn for defence is tiny relative to Britain’s GDP. The UK could easily absorb this through borrowing – especially in a global financial system where sterling is heavily traded – or, if the government prefers, through a modest wealth tax. Yet Sir Keir Starmer has chosen to frame this as a zero-sum game, where aid must give way to security. Why? Because this is not about economic necessity – it’s about political positioning. Labour wants to prove that it can be fiscally disciplined even when the numbers don’t demand it. It wants to neutralise Tory attacks, even when the real battle is over priorities, not affordability.It is also a move that aligns with Donald Trump’s worldview. The US president wants to close down the US government’s main overseas aid agency, treating it as an expensive indulgence rather than a pillar of foreign policy. Sir Keir is set to go to Washington this week. A UK prime minister that echoes Mr Trump’s “America first” instincts on defence and aid may find the meeting more congenial. If so, Sir Keir may be taking the idea that “the meek shall inherit the earth” a little too literally.Labour doesn’t just believe in fiscal discipline, it believes that it must believe in fiscal discipline and it constructs a justification for that belief. The problem is this: by accepting Conservative trade‑offs, Labour locks itself into an orthodoxy that it may later need to break. In a volatile world, Britain – outside the EU – must boost high-value exports and cut reliance on fragile supply chains. Even under Joe Biden, the UK was kept out of the US-EU Trade and Technology Council, which strengthened transatlantic industrial policy. Yet when does Downing Street admit Britain’s real limit is productive capacity – not budget deficits?Britain’s fiscal constraint is artificial, but its resource constraints are real. Energy, food and manufacturing are matters of national security, not just market functions. Without investment, dependence on key imports makes Britain vulnerable to supply-chain shocks and price inflation. That should make the announcements by Labour’s Ed Miliband and Steve Reed matter. If every pound spent requires a cut elsewhere, neither would have had much to say.Sir Keir often presents himself as a pragmatist rather than an ideologue – claiming to be adapting to circumstances rather than adhering to dogma. But such pragmatism is itself a belief system, one that treats capitalism’s rules as unchangeable, markets as beyond politics, and history as a one‑way street where past mistakes justify permanent, crippling caution. In doing so, he isn’t just rejecting alternatives – he’s rewriting history to suggest they were never an option to begin with.Do you have an opinion on the issues raised in this article? If you would like to submit a response of up to 300 words by email to be considered for publication in our letters section, please click here. More

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      Modi heads to US in mission to dodge a tit-for-tat tariff battle

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      The Indian prime minister, Narendra Modi, is heading to Washington for high-stakes talks in an attempt to avoid a trade war with Donald Trump.India is considering tariff cuts in at least a dozen sectors in the hope of dodging US tariffs that would pile more pressure on its already slowing economy.Wednesday’s meeting will test the much-hyped “bromance” between Trump and Modi, in which they exchanged bear hugs and effusive compliments during the president’s first term. Trump has called Modi “the nicest human being”, while the Indian prime minister has referred to the president as his “dear friend.” Both are populists who rose to power on waves of anti-establishment ardour and nationalism.The Indian foreign secretary, Vikram Misri, told reporters that the fact the prime minister had been invited to visit the US “within barely three weeks of the new administration taking office, shows the importance of the India-US partnership”.Trump has not held back his frustration over India’s high tariffs, labelling the country a “very big abuser” and accusing it of blocking US imports.Modi’s two-day visit comes shortly after Trump announced a 25% tariff on global steel and aluminium imports into the US. Calling the tariffs “the first of many”, the president indicated there could be levies on cars, chemicals, pharmaceuticals and other goods. He is planning a system of “reciprocal tariffs”, saying: “If they charge us, we charge them.”The metal tariffs have rattled India’s steel and aluminium industries, which export good worth billions of dollars to the US each year. The Indian Steel Association said on Tuesday the steel tariff was “expected to slash exports to the US by 85%”.In an effort to pre-empt punitive trade action, in its budget last week the Indian government cut duties on a range of goods, including high-end motorcycles such as Harley-Davidsons. It is also considering tariff cuts on other products, including electronics, medical and surgical equipment, chemicals, dish antennae and wood pulp, many of which originate in the US.Bilateral trade has been growing steadily, surpassing $118bn (£95bn) in the last financial year, with India running a $32bn trade surplus. Trump says he wants a relationship that is more “fair” while India says it is open to discussing a limited trade deal to address US concerns about market access.Trump has urged Modi to buy more US defence and energy products, with India presenting a lucrative market as the world’s largest arms importer. Nuclear energy, including small and modular reactors, is also on the agenda, as India seeks to expand its clean energy sources to meet decarbonisation targets. Reports suggest India is already in talks to buy combat vehicles and finalise a fighter jet engine deal.Another significant issue is Trump’s crackdown on illegal migration. The president says Modi has assured him India “will do what’s right” on the matter.The US last week deported 104 Indian migrants and plans to return many more. Images of deportees in shackles during a 42-hour military flight prompted public anger in India, with a senior Indian government official responding that “this kind of treatment can perhaps be avoided”. Discussions are expected to focus on managing the return of hundreds of other Indian nationals to be deported.Modi will also push for expanding H-1B visas, which are vital for the Indian IT workforce in the US. Importantly for Modi, Trump has expressed support for the H-1B visa programme, which brings skilled foreign workers to the tech sector. Elon Musk has backed the H-1B visa scheme, saying it drives innovation but, highlighting the ideological divide among key figures in Trump’s orbit, Steve Bannon and other Maga voices argue that H-1B visas siphon jobs and undermine American workers.Modi has framed his visit as an opportunity to build on the successes of the US-India partnership, in particular in technology, defence, energy, and supply chains. But his immediate mission is to keep trade relations from spiralling into a damaging tit-for-tat tariff battle. More

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

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

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      Trump scapegoats migrants again at Georgia event meant to discuss economy

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      At an event intended to tout economic policies that would usher in what his campaign calls a “new age of American industrialism”, Donald Trump spent as much time discussing personal grievances and blaming immigrants for everything from fentanyl overdoses to crime and taking Americans’ jobs as he did discussing the economy.“This is a speech on economic development but this is a big part of economic development,” the former president said of immigration at a speech in Savannah, Georgia, on Tuesday.After about 30 minutes of sticking to prepared remarks about the economy, Trump’s speech veered into other topics like immigration, much to the crowd’s delight.“Close the border!” a man in the crowd yelled as Trump said that undocumented immigrants were responsible for myriad ills.Some of the loudest cheers from a crowd of about 2,500 came when the Republican presidential nominee claimed that the United States already has much of what it needs to become an “economic powerhouse”, as he put it, including natural resources, skilled workers and leading companies.“The only thing we don’t have is smart people leading our country,” Trump said.Among other promises – including reducing Americans’ energy bills by half and claiming he would “prevent world war three” – Trump said he would revive American manufacturing and restore it to “how it was 50 years ago”. Trump also said he would block the sale of US Steel to the Japanese company Nippon – a plan that Joe Biden has said he plans to block.The former president bashed electric cars – with the exception of those made by his supporter Elon Musk – a perhaps odd tactic considering the ongoing construction of a $5.4bn Hyundai electric car plant that will employ 8,500 workers and has been lauded by Georgia governor Brian Kemp. Trump didn’t mention the plant or Kemp in his remarks.Trump then became sidetracked with immigration, questioning Kamala Harris’s intelligence and patriotism, and reliving an assassination attempt in July in Pennsylvania and another scare in Florida earlier this month.Trump claimed it had been more than luck that saved his life the day he was grazed by an assassin’s bullet.“People say: ‘It was God, and God came down and saved you because he wants you to bring America back,’” Trump said as the crowd began to chant “USA!”Eventually returning to the economy, Trump said a plan to give away federal land to companies willing to build manufacturing facilities there would prompt “entire industries” to relocate to the United States.skip past newsletter promotionafter newsletter promotionHe also said he would cap the tax rate for corporations at 15% – but only for companies whose products are made in the United States. Trump and Republicans already reduced the highest possible corporate tax rate from 35% to 21% when Congress passed the Tax Cuts and Jobs Act in 2017. The top-end corporate tax rate was made permanent under the law, but individual tax reductions included in the legislation are set to expire in 2025. Both candidates have said they want to see those tax cuts extended, but Harris says she would raise the highest rate to 28%.It was Trump’s first visit to Georgia since 3 August, when he held a rally in Atlanta. Last month, Harris visited Savannah and held a rally that drew nearly 9,000 supporters.Much of Trump’s economic policies can’t be separated from his views on immigration. That line of attack – that a weak economy and even inflation and the availability of goods is the fault of immigrants – resonated with a pair of the Republican candidate’s voters waiting to get into his event on Tuesday.“We don’t have enough groceries in our stores because of all the immigrants here,” said Christy Donley, who drove from nearby Pembroke to hear Trump speak. “We’ve got Americans here who can’t get the American dream but we’re giving the American dream to illegal immigrants.”Donley’s friend, Kassie Williams, chimed in.“Loans, healthcare, drivers’ licenses – we’re giving all this stuff to immigrants whether they deserve it or not,” said Williams, who believes that the corporate tax cuts Trump has proposed will help out individual workers. “I want to hear him be more detailed when he says he’s going to give corporations tax breaks. I understand how it benefits everybody – they’ll lower the unemployment rate, which will make for more tax revenue from people – but not everybody might understand that.” More

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      Why is Trump cozying up to America’s most powerful business leaders? | Robert Reich

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      The Business Roundtable is an association of more than 200 CEOs of America’s biggest corporations. It likes to think of itself as socially responsible.Last Wednesday, its chair, Joshua Bolten, told reporters that his group planned to drop “eight figures” while “putting its full weight behind protecting and strengthening tax reform”.Translated: it’s going to pour money into making sure that Donald Trump’s 2017 tax cuts – most of which benefit big corporations and the rich – don’t expire in 2025, as scheduled.On Thursday, Trump met at the Business Roundtable’s Washington headquarters with over 80 CEOs, including Apple’s Tim Cook, JP Morgan Chase’s Jamie Dimon and Walmart’s Doug McMillon.Trump reportedly promised the CEOs he would cut corporate taxes even further and curtail business regulations if elected president.Trump’s 2017 tax cuts reduced the rate of corporate income taxes from 35% to 21%. That has cost America $1.3tn.Those tax cuts, along with the tax cuts put in place by George W Bush, are the primary reason that the national debt is rising as a percentage of the economy.What have corporations done with the money they have saved? They haven’t invested it or used it to raise wages. Nothing has trickled down to average workers.A large portion has gone into stock buybacks. The year after the tax cut went into effect, corporations bought back a record $1tn of their shares. Buybacks do nothing for the economy but raise stock prices – and, not incidentally, CEO compensation, which is largely in shares of stock.Making Trump’s 2017 tax cuts permanent – as the Business Roundtable seeks – will cost $4tn over the next 10 years, $400bn per year – and cause the debt to soar.Yet every one of the CEOs that Trump met with last week has been thriving under Biden. Corporate profits are way up. Stocks are at near record levels. Inflation has plummeted.So why are they attracted to Trump, whose antics are likely to destabilize the economy? Is it mere ideology?Kathryn Wylde, the president and CEO of the Partnership for New York City (a non-profit that represents the city’s top business leaders), relates that Republican billionaires have told her “the threat to capitalism from the Democrats is more concerning than the threat to democracy from Trump.”In my experience, CEOs of large corporations are more practical than ideological. They’re coming around to Trump because they want even more tax cuts and regulatory rollbacks – which means even more money in their own pockets.The Business Roundtable’s motto – “More than Leaders. Leadership” – suggests a purpose higher than making its CEOs and corporations richer.Indeed, in August 2019 the Roundtable issued a highly publicized statement expressing “a fundamental commitment to all of our stakeholders”, including a commitment to compensating all workers “fairly and providing important benefits”, as well as “supporting the communities in which we work”, and protecting the environment “by embracing sustainable practices across our businesses”.Signed by 181 CEOs of major American corporations, the statement concluded that “each of our stakeholders is essential,” and committed “to deliver value to all of them”.The statement got a lot of favorable press. But it was rubbish. At the time, Bernie Sanders and Elizabeth Warren were gaining traction in the 2020 Democratic presidential primaries with their criticisms of corporate America, and the CEOs of the Roundtable were worried. They needed cover.Then, after the January 6 attack on the Capitol, many of these CEOs announced they would not provide campaign funds to Republican members of Congress who refused to certify the 2020 election.Now, they’re lining up to fund Trump, because they and their corporations want another giant tax cut and rollbacks of regulations.If the Business Roundtable’s CEOs were honestly committed to all their stakeholders, they wouldn’t seek massive tax cuts.If they cared about preserving American democracy, they wouldn’t support Trump or any Republican.The greedy cynicism of America’s corporate elite is now on full display.
      Robert Reich, a former US secretary of labor, is a professor of public policy at the University of California, Berkeley, and the author of Saving Capitalism: For the Many, Not the Few and The Common Good. His newest book, The System: Who Rigged It, How We Fix It, is out now. He is a Guardian US columnist. His newsletter is at robertreich.substack.com More

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      ‘Bidenomics’ is working – which means Biden and the Democrats may win too | Robert Reich

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      Until recently, I assumed that Joe Biden would get a second term despite worries about his age because most Americans find Trump so loathsome.But I’ve underestimated Bidenomics. It’s turning out to be the most successful set of economic policies the United States has witnessed in a half-century.It may not only give Joe another term but also give Democrats control over both houses of Congress. It may even put the nation on the path to widely shared prosperity for a generation.New economic data last week showed that inflation cooled to 3% in June, down from over 9% last year, and close to the Fed’s goal of 2%.And as inflation has subsided, real wages – that is, what paychecks will buy – have finally risen.Meanwhile, economic growth has accelerated. Consumer spending is solid. Consumers expect the economy to continue to do well.Inflation is coming down without a crash landing, in large part because the Fed’s rate increases – designed to slow the economy, stop wage growth and cause higher unemployment – are being offset by Bidenomics’ massive public investments in infrastructure, semiconductors, wind and solar energy, and manufacturing.This isn’t all. The Biden administration has added three other critical ingredients: the threat (and, in some cases, reality) of tough antitrust enforcement, a pro-labor National Labor Relations Board, and strict limits on Chinese imports.Taken together, these policies are beginning to alter the structure of the American economy in favor of the bottom 90%.In recent decades, the Fed has been in charge of evening out the business cycle, but no one has taken charge of altering the structure of the economy so that the poor and working middle class get a larger share of the gains.This restructuring has been difficult to achieve for the simple reason that the monied interests don’t want it.In Republican circles, the monied interests have preached the snake oil of supply-side economics, which legitimized giant tax cuts going mostly to the rich and large corporations.Those tax cuts – under Reagan, George W Bush and Trump – exploded the federal debt, fueled giant profits in the biggest firms and financial institutions, and stoked a surge in billionaire wealth but did literally nothing for average working people. Nothing trickled down.In Democratic circles, the monied interests have used neoliberalism – which has called for deregulation, privatization, free trade and the domination of finance over the economy.This orthodoxy pervaded the Clinton and Obama administrations. (I won’t bore you with my war stories, but trust me.)The result was similar to that of supply-side economics: wealth surged to the top, but average working people remained stuck in the mud.In contrast to both supply-side economics and neoliberalism, the Biden administration is focused on altering the structure of the economy.Over the past year, manufacturing construction in hi-tech electronics, which the administration has subsidized through Chips and the Inflation Reduction Act, has quadrupled.Tens of billions in infrastructure spending has been funneled to the states for road, water system and internet upgrades.More clean-energy manufacturing facilities have been announced in the last year than in the previous seven combined.Biden understands that these investments must translate into high-paying jobs, which often require unions.“When I think climate, I think jobs … union workers are the best workers in the world,” he said in a recent speech on what he has called Bidenomics.The monied interests don’t want unions, of course. The narrow congressional majority that got these bills passed rolled back some of the labor conditions that originally accompanied the tax credits and grants.Moreover, much of the funding is pouring into so-called “right-to-work” states that make it exceedingly difficult to unionize.But a buoyant economy strengthens the hand of workers, making it easier to unionize – which helps explain the ubiquitous labor action this summer.Voters may not yet understand Bidenomics, but it’s probably not necessary that they do in order for Biden and the Democrats to benefit.If Bidenomics continues to alter the structure of the economy in ways that help the vast majority, voters will give Biden another term and reward Democrats with both houses of Congress.And if Bidenomics is successful, it will make the American economy both stronger and fairer in years to come.I’m betting on it.
      Robert Reich, a former US secretary of labor, is professor of public policy at the University of California, Berkeley, and the author of Saving Capitalism: For the Many, Not the Few and The Common Good. His new book, The System: Who Rigged It, How We Fix It, is out now. He is a Guardian US columnist. His newsletter is at robertreich.substack.com More