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    Crypto giant Tether CEO on cooperating with Trump administration: ‘We’ve never been shady’

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    Paolo Ardoino, CEO of the cryptocurrency company Tether, was flying over Switzerland last week as he contemplated the changing regulatory landscape.Tether used to be at war with the establishment. Now it is the establishment.The crypto giant – tether is the most traded cryptocurrency in the world – has had a strange trip. Four years ago, banks were dropping Tether as a client, and regulators in New York had the company against the wall over questions about commingled client and corporate funds. Treasury officials were complaining that dollar-backed cryptocurrencies enjoyed the international privileges of the dollar without the responsibilities of preventing its misuse. Federal investigators were looking into Tether for possible violations of anti-money-laundering and sanctions rules.The cryptocurrency industry anecdotally – and conspiratorially – describes the Biden administration’s posture toward crypto as a systematic effort to debank crypto in the form of tactics such as “Operation Choke Point 2.0”. Ardoino says Tether’s leadership needed to become globetrotters in search of someone to take their business.And it’s a lot of business. Tether currently is the 17th largest holder of US government debt, with nearly as much in treasury bonds in its digital vaults as Saudi Arabia. Tether’s value remains stable because it is pegged one-to-one to the dollar, meaning the value of each individual tether coin is $1. The company backs the total value of the cryptocurrency with dollar assets like treasury bonds in an American bank – in this case, $140bn deposited with Cantor Fitzgerald.Tether comes just behind bitcoin and ethereum as the most valuable cryptocurrency, and by most measures it is the most widely traded. Investors in countries with unstable currencies, like Turkey or Argentina with their 40%-plus inflation rates, use it to hold on to the value of their savings against the dollar. Crypto traders use tether to park their digital assets in a safe place.The degree of cooperation between Tether and law enforcement reflects an evolving shift in the government’s posture toward the company, even as federal agencies had been cracking down on cryptocurrency more broadly under Joe Biden.“We’ve never been shady,” Ardoino said. “The company has been great. It has been attacked. Debanked. You know, when you’re trying to be a disruptor – in a good sense – you are going to always be attacked by the establishment.”Previous administrations’ hostility to crypto – and perhaps to tether in particular – was the product of strategic mistakes the company had made, Ardoino said.“We were very naive. We thought: ‘Oh, we are going to keep our head down.’ We were not communicating. We were not telling what’s going on, and that was used against us,” he said. “And that’s fair, right? So, if someone is not communicating, or you feel is not transparent enough, then that is how people get to fear.”After settling its case with New York regulators in 2021, Tether began to come out of its shell, publishing quarterly statements and expanding its cooperation with the government. Today, things are different for Tether. Its banker – the Cantor Fitzgerald CEO Howard Lutnick – has been confirmed as secretary of commerce in the Trump administration. The company says it is proud of its cooperation with US law enforcement. Though Tether’s holding company is headquartered in crypto-friendly El Salvador, the cryptocurrency is expanding in a way that Ardoino says will help the United States secure its position as the world’s reserve currency.“We have 400 million users in emerging markets,” Ardoino said. “We are basically selling the US debt outside the US … We are decentralizing the US debt as well, basically pushing for dollar hegemony. That’s how the US can maintain its dominance when it comes to its currency.”It’s a line Lutnick might have written into his confirmation hearing speech himself. The Senate confirmed Lutnick on a party-line vote 51-45 in February. Ardoino said their relationship is at arm’s-length now, though.“Cantor [Fitzgerald], they are our custodian. So, we will continue to have this relationship with Cantor,” he said. “They have been a great custodian for us. They are primary dealers, so we can have basically direct access to the Fed[eral Reserve] to purchase [government] debt. With Howard, when he goes into government, we cannot talk to him.”Lutnick has been a vocal backer of cryptocurrency and tether’s position in the industry in particular. Senators had some sharp questions for him about tether at his 29 January hearing, with Senator Maria Cantwell pressing him about audited holdings.“Do you think the market needs to comply with audits about whether one-to-one ratios really exist on stablecoins?” Cantwell asked Lutnick.“I believe stablecoins, US dollar stablecoins, should be audited, should be completely backed by US treasuries 100%,” Lutnick replied.skip past newsletter promotionafter newsletter promotion“How do we prove that?” Cantwell then asked.“A US audit and one-to-one backed by US treasuries,” Lutnick continued. “And lastly, you can’t change the rules; meaning if someone has bought the stablecoin, you can’t change the price. If someone’s made a deposit with you, you can’t say: ‘I’m going to withdraw, you’re going to change the price.’”She also asked about reports that “as much as $19bn of Tether could be illicit activity by the North Koreans, the Russians, the Chinese. And so, what do we do about that? What is your solution?”“It’s like blaming Apple because criminals use Apple phones,” Lutnick replied. “It’s just a product. We don’t pick on the US treasury because criminals use dollars. So, I think it’s just a product … They are signed up with all US federal law enforcement. They follow all federal law enforcement instantly.”Ardoino rejects the suggestion of tether’s usefulness to criminals. “There is no financial institution – even the big banks, they don’t have this breadth of collaboration,” he said, citing more than 200 agencies in 50 countries that work with Tether.A Swiss bank might rebuff an American law enforcement agency coming for money in its accounts. Tether, however, touts its ability to return money stolen from others. For example, a notable “pig butchering” scam last year sent Shan Hanes, CEO of Heartland Tri-State Bank in Elkhart, Kansas, to a 293-month federal prison term for embezzling $47.1m and sending it overseas as cryptocurrency. Tether was able to recover $8.3m for the victims.The traditional banking system is more porous than a cryptocurrency wallet right now, Ardoino argued.“When [criminals are] finally trying to use blockchain and move money on the blockchain in USDT [tether’s trading symbol], we see them and we freeze them,” he said. “And it takes 15 minutes to freeze an address from our stock. We are much more granular and faster than any bank or any other financial institution. So, I’ve been saying very loudly and publicly that any criminal using USDT is a very stupid criminal, because we can see everything and we can catch it.”Ardoino does see a threat in an adversarial regulatory relationship toward crypto, both in the United States and Europe. Both Coinbase, the largest cryptocurrency exchange in the US, and EU-based exchanges removed USDT because it does not comply with the EU’s Markets in Crypto-Assets regulation, which went into effect at the end of 2024. Traders can hold Tether in non-custodial wallets but can’t trade it on an exchange that complies with European regulations.“I think that the US understands very well that they should very, very much avoid a DeepSeek moment for finance and crypto,” Ardoino said, suggesting that it is possible that some invention in a stealth-mode lab somewhere beyond the industry’s attention could radically change the competitive environment. Ardoino was referring to the Hangzhou-based startup DeepSeek, a large language model AI that emerged seemingly from nowhere in January that could compete with Meta and OpenAI’s offerings at a fraction of the cost. Its emergence is disrupting AI business plans by changing the competitive environment.Ardoino hopes the new administration will have settled on its approach to regulations – likely to be much friendlier than its predecessor’s – by September, he said. “I think that they want to get regulations done by June. June would be very aggressive as a timeline, but September is realistic.” More

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      Republicans want corporate oligarchy. We need economic democracy | Rashida Tlaib and Michael A McCarthy

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      Families in the US are exhausted. They deserve a government that chooses them over billionaire donors. The Republican budget plan that passed the House last week calls for $4.5tn in tax giveaways for the ultra-rich and corporations. It will be paid for with enormous cuts to Medicaid, food assistance and other federal programs that serve our families and the working class. These are the folks Elon Musk refers to as the “parasite class”.The agenda of the billionaire president and the richest man in the world is crystal clear: making the rich richer while working families struggle.Our democracy is dominated by the ultra-rich because our economic system concentrates ownership and investment power into their hands. Extreme inequality is often addressed by doing one of two things: redistributing wealth, via taxes and social programs, or changing laws and policies to increase worker incomes, such as raising the minimum wage. While these strategies are certainly necessary, in both cases our economy’s core institutions – the multinational corporations, banks, pension funds and hedge funds – are left to run as usual. But this is where so much power in the US lies.There is a third option: creating a democratic economy that widely distributes the power that comes through ownership and decision-making.In a democratic economy, ownership is extended beyond the wealthy few, to public and private institutions, such as cooperatives and non-profits, driven by the interests of ordinary people. In many worker cooperatives, for example, the workers own the firm and elect the board on a one-member, one-vote basis. This makes power on the shop floor and pay scales much more equal.The groundwork of a more democratic economy can already be seen across our country, in community land trusts, community development corporations, multi-stakeholder cooperatives, community development credit unions, housing cooperatives, community solar arrays, municipal broadband and the public Bank of North Dakota, which has operated successfully for more than 100 years. Glimpses of a new economy are there within the cracks of our failing system.We have also seen political crises provide opportunities for larger scale public ownership. In the wake of the 2008 crisis, the US government became the largest shareholder of General Motors, Citigroup and American International Group. While these stakes were eventually sold back, the next time, instead of bailing out failed businesses, we should transition them into democratic public ownership at the municipal, state or national levels. Other firms might be converted into worker cooperatives or multi-stakeholder cooperatives, governed by workers, consumers and community representatives, ensuring those same groups benefit from the company’s operations. And monopolized banks and large asset managers can be converted into democratic regional and local public banks that serve communities rather than shareholders.Beyond crisis moments, which this government is sure to produce, new public options can be established or expanded in industries such as education, childcare, housing, pharmaceutical development, healthcare, asset management and more. These public options can provide needed goods and services at prices accessible to all, while injecting competition into monopolized industries.From Los Angeles to New York, for example, there are dozens of grassroots movements across our country building public options for finance. Democratic public banks and public asset managers are not run by a corporate board at the command of profit-driven shareholders lounging on yachts somewhere on the other side of the world. Instead, democratic finance draws people from across a community, through processes of random selection, election or appointment, to deliberate over and make binding decisions about how pools of assets should be allocated and invested. Without shareholders or marketing expenses, and often tax exempt, these forms of democratic finance can offer much lower-cost loans and services to working people.Powered by democratic mandates, they can make investments in renewable energy, affordable housing, community wealth-building and other institutions that meet people’s real needs. The Detroit Justice Center, for instance, is working to develop community land trusts, which are non-profits that establish community control of land and permanent affordability of housing. Democratic public banks, such as those promoted by the Public Banking Act of 2023, could provide a ready source of capital.In a democracy, power should be in the hands of workers, community members, and democratically accountable representatives – not billionaires who govern to enrich themselves. The Republican budget is the natural outcome of an economy that funnels power and wealth to elites, while leaving working people to fend for themselves. Let’s show the billionaires we can build a democratic alternative to their corporate oligarchy.

      Rashida Tlaib represents Michigan’s 12th district. Michael A McCarthy is the director of community studies at the University of California Santa Cruz and author of The Master’s Tools: How Finance Wrecked Democracy (And a Radical Plan to Rebuild It). More

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      Trump temporarily spares carmakers from US tariffs on goods from Canada and Mexico

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      Donald Trump has temporarily spared carmakers from sweeping US tariffs on goods from Canada and Mexico, one day after an economic strike on the US’s two biggest trading partners sparked warnings of widespread price increases and disruption.The US president extended his aggressive trade strategy at midnight on Tuesday by targeting the country’s two closest neighbors with duties of 25%.US retail giants predicted that prices were “highly likely” to start rising on store shelves almost immediately, raising questions about Trump’s promises to “make America affordable again” after years of heightened inflation.After a call with top executives at General Motors, Ford and Stellantis, however, Trump approved a one-month exemption from tariffs on “any autos coming through” the US, Mexico and Canada, the White House press secretary, Karoline Leavitt, announced on Wednesday.The exemption has been granted “at the request of the companies”, Leavitt told reporters, “so they are not at an economic disadvantage”.While Trump has claimed tariffs will embolden US industry by forcing global firms to build factories in the US, Ford CEO Jim Farley publicly cautioned last month that imposing steep tariffs on Canada and Mexico could “blow a hole” in the country’s auto industry.Shares in large carmakers rose sharply, with GM up 7.2%, Ford up 5.8% and Stellantis up 9% in New York. The benchmark S&P 500 increased 1.1% on Wall Street.A separate call between Trump and Justin Trudeau, the Canadian prime minister, did not lead to any larger breakthrough, however. Trudeau “largely caused the problems we have with them because of his Weak Border Policies”, Trump declared on his Truth Social platform after they spoke. “These Policies are responsible for the death of many people!”Trudeau insisted there had been improvements at the border, the US president claimed, adding that he told him this was “not good enough”.During Trump’s joint address to Congress on Tuesday evening, he acknowledged that tariffs would cause disruption. There will be “a little disturbance, but we’re OK with that”, he said.He blamed cost of living challenges on his predecessor, Joe Biden, from whom he claimed to have inherited “an economic catastrophe and an inflation nightmare”.The US economy has, in fact, remained resilient in recent years, and inflation has fallen dramatically from its peak – at the highest level in a generation – three years ago.“Among my very highest priorities is to rescue our economy and get dramatic and immediate relief to working families,” said Trump. “As president, I am fighting every day to reverse this damage and make America affordable again.”skip past newsletter promotionafter newsletter promotionTrump spoke on Wednesday with Trudeau. “Even though you’re a very smart guy, this is a very dumb thing to do,” Trudeau told Trump publicly after the US imposed tariffs this week.Trump had initially pledged to target Canada and Mexico with tariffs on his first day back in office. Upon his return, however, he said he was considering imposing the tariffs at the start of February. Last month, he offered Canada and Mexico a one-month delay at the 11th hour.Trump and his allies claim that higher tariffs on US imports from across the world will help “Make America great again”, by enabling it to obtain political and economic concessions from allies and rivals on the global stage.But businesses, both inside the US and worldwide, have warned of widespread disruption if the Trump administration pushes ahead with this strategy.Since winning November’s presidential election, the president has focused on China, Canada and Mexico, threatening the three markets with steep duties on their exports unless they reduced the “unacceptable” levels of illegal drugs crossing into the US. More

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      ‘The relationship is broken’: Canadians respond to Trump’s tariffs

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      “Since Donald Trump began his tariff threats against Canada and his ‘jokes’ about making Canada the 51st US state, I have not bought a single product originating in the US,” said Lynne Allardice, 78, a retired business owner from New Brunswick, Canada.“Not a single lettuce leaf or piece of fruit. I have become an avid reader of labels and have adopted an ‘anywhere but the US’ policy when shopping. I will not visit the States while Trump remains in office, and most of the people I know have adopted the same policy.”Acquaintances, Allardice added, were selling US holiday properties they had owned for many years.View image in fullscreenMany Canadians have responded to Trump’s economic tariffs and political messaging with a consumer boycott of US products and services – no more California wines or American Bourbon; local shopping instead of Amazon Prime; analogue entertainment and cable TV instead of Netflix; holidays in the Kootenays instead of Disney World.Hundreds of people from across Canada shared with the Guardian their reactions to Washington’s political and economic gear change, and how they may be affected personally.Many expressed defiance and anger over what they saw as a hostile new US administration that was no longer an ally and, voicing economic fears and a sense of permanent loss, said they would no longer buy US goods nor cross the border again – at least while Trump was in office.Pam, a 64-year-old retired woman from British Columbia, said she and her husband had cancelled a five-week trip to Palm Springs, losing their $5,000 (£3,900) deposit. They were planning, she said, to buy a Honda truck now instead of a Ford.Many said their local supermarkets had displayed labels marking Canadian products and that they were happy to pay significantly more for non-US goods, for example 50% more for Mexican lemons; others said they hoped Canadian companies would expand offerings and services after cancelling Amazon Prime and streaming platform subscriptions.One woman from British Columbia who lives a 10-minute drive from the US border and is participating in the boycott pointed to the irony of having joined several Facebook groups promoting Buy Canadian campaigns – one of which had now ballooned to 1.2 million members.View image in fullscreenAmid fiery pledges to stand up to the US government, hundreds of Canadians shared grave concerns about the impact of the trade tariffs on their personal finances.Many said they were anxious about their retirement savings amid the market turmoil and economic uncertainty that have followed what they referred to as Trump’s “economic warfare”.Scores said hiring and budget freezes were already happening in the companies they worked for, while a number of business owners highlighted a loss of sales since Trump’s election that was likely to worsen.People working in sectors including hospitality, tourism, retail, entertainment, the wider service industry, manufacturing, the auto industry, aviation, property and construction, agriculture, marketing and financial services, among others, shared concerns about their business or line of work being negatively affected by the tariffs and resulting economic uncertainty.Ian Hallett, the owner of an architectural bureau, from Seaforth, Ontario, said: “With steel, wood and aluminum tariffs, the construction industry will be hit hard and fast, which means a slowdown in building. We will likely have to lay off staff.”The owner of a landscaping business in Calgary, Alberta, said his sector would be “highly impacted” by the tariffs. “People won’t spend money to maintain or redesign their lawn. I may have to reduce my workforce and potentially shut down the season early. This will have a domino effect,” he said.View image in fullscreenAdrian, a business owner from Northern Ontario, said: “The tariffs have created chaos, anxiety and depression, a loss of hope. My US sales have dropped and if the tariffs [stay in place], I will have to close my business, as American customers are half my sales.”A 65-year-old support worker at an elementary school from Toronto said: “I’m worried my husband may lose his manufacturing job because the company he works for has a lot of American customers. Tariffs may make the building materials products his company makes too expensive.”Various business owners who were expecting a collapse in North American sales predicted that it would be impossible to make up the difference by increased exports to Europe or other parts of the world, where the markets were either saturated or shipping was too expensive.“I’m stressed about my investments and the financial markets, and I’m concerned about prices going up,” said Susan, an accountant from Toronto, mirroring the fears of many.While most of those who got in touch were outraged by Trump’s America First protectionism, scores of Canadians signalled an appetite for an isolationist approach for Canada, too.“I think that we should take a tip from Trump and build our own wall to keep the USA out,” said a 56-year-old single mother from Montreal. Scores of Canadians said they felt Canada needed to strengthen its military.Sarah from Nova Scotia said the Trump administration’s tactics and “threats against sovereignty, water, resources and territory” had “fired people up to be less dependent and integrated economically”.Antoine Delorme, a 43-year-old self-employed heavy machinery mechanic from Montreal, who has to order parts and material from the US every week, appeared to blame globalisation for Canada’s perceived vulnerability.skip past newsletter promotionafter newsletter promotion“With free trade, we lost a lot of economic independence. Many distributors are centralised south of the border [and] no longer need to keep Canadian facilities,” he said. Like many others, he felt Canada was now exposed, economically and militarily. “If the USA turns into a hostile neighbour, no one will be in a position to meaningfully help us,” he said.View image in fullscreenJean Whieldon, a retired journalist from Ontario, said: “We have become too dependent upon America – Trump is right about that. Who can we turn to for help and protection? Nato? The UK? Don’t make me laugh, it hurts too much.”Hundreds of people expressed fury over a perceived lack of solidarity from allied nations and were particularly critical of the British prime minister, Sir Keir Starmer, and King Charles.“Canada’s relationship with the rest of the world has changed for ever,” said Katy, a finance professional from Toronto. “We just came to the stark realisation that allies are an illusion. As we endure the Maga onslaught, our supposed ‘allies’, including Britain, remain silent. Our ‘head of state’, King Charles, remains silent. Nato countries remain silent. We will weather the economic storm, but [I am] not so sure about our relationships with other nations.”Canada, Katy added, could leave international partnerships as it was “blessed with innumerable natural resources”. “If things don’t change, then Canada needs to extricate itself and consider becoming a neutral country. Dismantling the constitutional monarchy is now a must. The Commonwealth is dead.”Hundreds of Canadians reported a palpable, freshly ignited rise of patriotism, as well as a kind of nationalism usually frowned upon in Canada.“Canadians have become much more nationalistic,” said a woman from Ontario. “Some of us have been booing at the US national anthem at hockey games, which is not typical Canadian behaviour. We are furious about the tariffs that will deeply hurt Canadian businesses and quite likely see other companies move their operations south of our border.”View image in fullscreenDonna, a retired woman living in a small city in British Columbia, said: “We have lost our trust in the USA as a friendly country. Patriotism was never something that Canadians celebrated enthusiastically. Today I see more Canadian flags than I have ever seen – in front yards, hanging from porches and hedges, and adorning cars. Both sides of the political spectrum and a majority of citizens are much more united than before.”A woman in her 40s from British Columbia who works in tech agreed: “There’s a huge sense of national unity around the country, and a lot of focused action to build our nation up.” She said she had “quit the US cold turkey”.“This is a shift unlike any I have seen in my lifetime, and unlike anything my parents have seen either. Canada is turning away from the US – if not forever, at least for a long time. Goodbye America, we’ll miss what we had, but not what you have become.”While some people said they were differentiating between the Trump administration and their American neighbours, others shared feelings of personal hostility towards the American population, saying they wanted to “stick it to” their “poorly educated neighbours to the south”, as one woman from British Columbia put it, echoing the remarks of many.Scores of Canadians said they had fallen out with American friends and even family members over the political tensions between the two countries and ideological disagreements over American and Canadian democracy, freedoms and Trump himself.View image in fullscreenA silver lining to the economic upheaval, various people pointed out, were renewed efforts to improve intra-Canadian trade between provinces.Matt, 41, a university employee from Vancouver Island, said: “Having a common opponent in the USA is drawing many people of my vast country together in ways that were seemingly impossible just a year ago. The work being done to dismantle inter-provincial trade barriers, with the potential to add tens to hundreds of billions of dollars to our economy, would never have had the political backing without Canada facing a significant external threat.”Most Canadians who got in touch felt that ties between Canada and the US had been permanently damaged.“The relationship is broken,” said Allardice, the pensioner from New Brunswick. “A great many Canadians hate the USA now. How can you remain on good terms with a neighbour who threatens your economy and jokes about bringing you to your knees?” More

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      China and Canada retaliate after Trump trade tariffs come into effect

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

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      Trump threatens 25% tariffs on foreign cars and semiconductor chips

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      Donald Trump stood firm against warnings that his threatened trade war risks derailing the US economy, claiming his administration could hit foreign cars with tariffs of around 25% within weeks.Semiconductor chips and drugs are set to face higher duties, Trump told reporters at a news conference on Tuesday.The White House has repeatedly raised the threat of tariffs since Trump returned to office last month, pledging to rebalance the global economic order in America’s favor.A string of announced tariffs have yet to be introduced, however, as economists and business urge the Trump administration to reconsider.Duties on imports from Canada and Mexico have been repeatedly delayed; modified levies on steel and aluminum, announced last week, will not be enforced until next month; and a wave of so-called “reciprocal” tariffs, also trailed last week, will not kick in before April.Tariffs are taxes on foreign goods. They are paid by the importer of the product – in this case, companies and consumers based inside the US – rather than the exporter, elsewhere in the world.Asked on Tuesday if he had decided the rate of a threatened tariff on cars from overseas, Trump said he would “probably” announce that on 2 April, “but it’ll be in the neighborhood of 25%”.Upon being asked the same question about threatened tariffs on semiconductors and pharmaceuticals, Trump replied: “It’ll be 25% and higher, and it’ll go very substantially higher over the course of a year.”The ramp-up, he explained, was designed to lure manufacturers to the US. “When they come into the United States, and they have their plant or factory here, there is no tariff.”Executives have cautioned that the administration’s plan for tariffs risks harming the US economy. A 25% tariff on Mexico and Canada “will blow a hole in the US industry that we have never seen”, Jim Farley, the Ford CEO, told an investor conference in New York last week. More

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      ‘It comes from racism’: immigrant workers on Trump’s deportation push

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      Donald Trump has ramped up anti-immigration fervor into his second presidency, promising mass deportations, pushing to increase arrests and bolstering public relations efforts to amplify arrests. The moves have sent a wave of terror through the undocumented worker community that underpins large parts of the US economy.“Every day I wake up and walk out the door, I go with the hope of going to work, but with the fear of not being able to come back,” said a construction worker and single parent in Texas who obtained immigration protection under the Biden administration. She requested to remain anonymous due to fears about her immigration status.“Every day I worry if something happens, who will take my kids,” she said. “I have only one child born in the US. They are the only one who might be able to return, but me and the other kids would not be able to come back.”She claimed that since Trump took office for his second term, there had been fewer opportunities to work construction jobs given the increased fear of Immigration and Customs Enforcement (Ice) raids at workplaces.Despite being in the US for 10 years and constantly trying to obtain documentation, she explained it took her experiencing weeks of wage theft to be able to get documentation through the deferred action program, which provides temporary status and work authorization to immigrants who have been victims of labor abuses.“Unfortunately, these next few years will be years of fear, years of silence,” she said. “I believe the anti-immigrant pushes are racist. People have been taken away without criminal records. We used to have the ability to pay fines before because we didn’t have criminal records, but I’ve heard from other immigrants, anyone being taken into custody by Ice, regardless of their situation, will be deported.”Trump has signed an executive order to allocate military resources at the US border with Mexico and opened Guantánamo Bay prison in Cuba to the detention of undocumented immigrants. The Department of Homeland Security also rolled back a policy of restricting Ice arrests at sensitive locations such as hospitals, places of worship and schools and the agency is pushing to recruit IRS agents to assist in immigration enforcement. The administration is also reportedly planning to reopen family detention centers.View image in fullscreenThe changes come as Trump campaigned with misleading and false statements about immigrants, portraying them as criminals and taking away jobs, including making a baseless claim that Haitian immigrants in Ohio were eating pets.Despite this rhetoric fomenting xenophobic sentiments, an October 2024 report by the Economic Policy Institute on the benefits of immigration to the US cited the enabling of economic growth as the US-born workforce declines, and the payment of nearly $100bn annually in taxes, and noted mass deportations actually result in job losses for US-born workers due to reduced local demand output.Several industries rely heavily on immigrant workers. Nearly 2.9 million immigrants, the most in any occupation group, are employed in construction and extraction, comprising 34% of employment in these occupations in the US.The Guardian spoke with several immigrant workers in construction about their experiences and fears caused by Trump’s immigration policies and the anti-immigrant sentiments stoked by his rhetoric and policies.Another undocumented construction worker in Texas said there is a “constant fear” in going to work every day that his workplace will be raided by Ice or that he will return home to find his family, the majority of whom are undocumented, taken away.“It is a constant fear. It’s something we can’t take from our minds, every instance of the day,” they said. “My main worry is there will be one day where my family might be taken away from me and be sent back to Mexico.”Trying to acquire legal documentation has been “almost impossible”, they added. “The reason behind these policies, it comes from racism. The majority of immigrants aren’t criminals. Like myself, a lot of immigrants come to this country to be able to fulfill their dreams, to be able to work. We’re humans and we have rights. The things we go through when being held in immigration detention, unless you live them, you won’t be able to understand it.”Andres Surquia of Georgia currently has immigration protection through deferred action – a government policy that allows certain undocumented immigrants to work and avoid deportation for two-year periods.“I’m scared because Trump has said he wants to remove deferred-action protections, which took me so long to get,” he said. “As immigrants, we come into this country to work and we want to be respected and protected.”The International Union of Painters and Allied Trades, which represents 140,000 workers in the US and Canada, pushed to secure deferred-action immigration protections for workers experiencing labor abuses in construction for the past several years under the Biden administration.“It was one of the main pillars we put forth as a union, in coalition with other unions, that really view immigration as a working-class issue,” said the IUPAT general president, Jimmy Williams. “Now, under the Trump administration it’s going to go back to all these workers having no recourse, and the employers continuing to be able to use their status as a way to keep them further and further from being able to speak out.”Immigration is a labor and economic issue, Williams said. The union views it as a responsibility to fight and defend these workers because they are their union members. But he expressed disappointment with Democrats whom he feels have so far failed to support these workers.“Where’s the resistance?” Williams asked. “When will the Democratic party really get it right on framing this as a working-class issue and put the target solely on where it belongs, which is on the employers that have abused this system for decades now, keeping workers’ rights down, keeping wages down? You’ve seen limited to no response from the opposition.”A construction worker in Texas who has been pursuing asylum said she had seen fewer people show up to work out of fear in recent weeks.“There’s not many people going to work any more, because of the fear. The only reason why I go to work is it’s a necessity to bring food home and pay bills,” she said. “They want to extract the people that are working in the farms, that are working in the fields, that are working in the restaurants that they eat in, and now they’re taking them without any explanation. It’s not fair.”Milton Velásquez is a construction worker in Maryland from El Salvador who currently has temporary protected status (TPS), provisional protection given to nationals of some countries in crisis. Trump has already revoked these protections for 350,000 Venezuelans and has incited fears he will revoke or limit protections for 1 million immigrants in the US from 17 nations granted protections under the Biden administration.“It scares me because if my TPS does get revoked, I will lose a lot of job opportunities without it and it would limit my income,” he said. “There is always fear of deportation. I try not to think about it, but what scares me the most is having to go back to El Salvador. I would have to work 10 times as much to get paid $10 a day.”Under the first Trump presidential term, Velásquez faced issues with trying to bring his son and daughter to the US from El Salvador through the Central American Minors program, which Trump shut down in 2017. He is still separated from his daughter.“I tried to get her a visa,” Velasquez added. “I’ve been longing to bring them here. That’s what I work for, to provide for my family, to get my family to come here.”Send us a tipIf you have information you’d like to share securely with the Guardian about the impact of the Trump administration’s temporary protected status decision, please use a non-work device to contact us via the Signal messaging app at (929) 418-7175. More

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

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

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      Trump policies make US ‘scary place to invest’ and risk stagflation, says Stiglitz

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      Donald Trump’s tariff threats have made the US “a scary place to invest” and may unleash stagflation, the Nobel prize-winning economist Joseph Stiglitz has said.“It risks the worst of all possible worlds: a kind of stagflation,” Stiglitz said in an interview with the Guardian.He argued that despite optimism about the US economy at the turn of the year, the uncertainty created by Trump’s on-off tariff plans and the president’s apparent contempt for the rule of law would deter investment.“If you’re a corporate in the US or in Europe, do you think you have a global market, or do you have just a European market? Where do you locate your factories?” he said.He highlighted Elon Musk’s efforts to slash government departments without congressional authority, and Trump’s disregard for contracts – including the trade pact he struck with Canada and Mexico in his first term – among damaging signals for investors considering the US as a destination.“The government has a huge number of contracts and we’re just tearing them up. How much risk do you want? The US has become, I would say, a scary place to invest,” he said.Stiglitz argued that the uncertainty was likely to slow economic growth, while at the same time Trump’s tariffs – and retaliation by other countries – would drive up inflation.The prospect of rising inflation in the world’s largest economy has led investors to pare back bets on the US Federal Reserve cutting interest rates since Trump’s return to office, amid mounting concern over the fallout from a global trade war.Stiglitz, a Columbia University professor and former World Bank economist who served as chair of Bill Clinton’s council of economic advisers, said the Fed was “clearly worried” about the inflationary effects of Trump’s policies, which could lead it to raise interest rates.“Almost all economists agree that the tariffs will increase prices. How much it will increase prices is a little bit affected by the magnitude of the appreciation of the exchange rate, but all economists think that the extent of the appreciation of the exchange rate won’t be anywhere near enough to compensate for the tariffs.skip past newsletter promotionafter newsletter promotion“I could certainly see a scenario where we get to stagflation – we get inflation, and a weak economy,” he said. “I cannot see a really robust economy, because I just see the global economy suffering so much from the uncertainty that Trump poses.”Scott Bessent, the US Treasury secretary, has suggested the administration wants to bring down 10-year US Treasury yields, an important interest rate, which would have a knock-on effect across global markets. Lower Treasury yields would make it cheaper for Washington to borrow.But Stiglitz suggested the only way the president’s policies would positively contribute to that goal was by running the US into the ground. “The inflation from the tariffs is going in the wrong way, and the only thing that is going in the right way for Bessent is his efforts to crater the economy,” he said.“In supporting Trump’s economic policies, [Bessent] is helping to get the yield curve down by crashing the US economy – not a good policy, I would say.” More