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

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

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

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

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

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      By imposing punitively high tariffs, Donald Trump was playing a high-stakes game of chicken with the US’s trading partners – but it was Trump who chickened out and suspended his tariffs just hours after they took effect. The president couldn’t ignore the worldwide economic havoc that he had caused singled-handedly – stock markets were plunging, business executives were panicking and consumers were seething.Eager to persuade manufacturers to build new plants in the US, Trump said on Monday that many of his tariffs would be permanent. But for Trump, permanent evidently meant two days.Once again, Trump showed that his second term is one of fiat, flub and flip-flop, of bluster and blunder, of shooting first and aiming later. It’s also a mix of cutting, gutting and cruelty.And foolery. Trump’s tariffs are worse than, as the Wall Street Journal put it, the “dumbest trade war in history”: they are the dumbest economic policy that any US president has ever adopted. His tariffs quickly caused vast and totally unnecessary damage to stock markets, industries and diplomatic relations across the globe. Before Trump unexpectedly suspended the tariffs, US stock markets had lost more than $10tn in value, and stock markets overseas plummeted, too. Millions of retirees had seen their 401(k)s plunge in value, consumers were facing substantially higher prices and many workers were already losing their jobs as Trump’s tariffs sent shockwaves through the global economy.Trump’s embarrassing climbdown on tariffs was one of the rare times he bowed to common sense. If only he would do the same when it comes to his dangerously myopic cuts to scientific research, environmental protection and foreign aid.Trump has not climbed down, however, in his showdown with China. In a fit of pique over China’s retaliatory tariffs, Trump has imposed stratospheric 145% tariffs on China. Attention Walmart shoppers: that is going to more than double the price of many things you buy.When it came to tariffs, Trump made some basic political fumbles. Not only did he go golfing and speak at a million-dollar-a-head fundraiser as this economic disaster unfolded, but he failed to give a coherent explanation for his screw-everyone-else tariffs. Trump and his team pointed to a potpourri of often-conflicting goals: to erase trade deficits, to collect trillions of dollars for the treasury, to bring back manufacturing jobs, to give Trump negotiating leverage to crack down on fentanyl and immigration and reduce other countries’ tariffs.Let’s not delude ourselves. There are two main reasons for Trump’s tariffs: first, to satisfy his never-ending thirst for vengeance against those he feels have wronged him (which seems to mean every country in the world except Russia) and second, to fulfill his desire to wield a club over everyone and everything. By using staggeringly high tariffs as a weapon, Trump has been acting like a mob enforcer, telling every business in town: I’m going to clobber you with my baseball bat unless you do what I want.There’s another reason for Trump’s tariffs: his ignorance about how the world’s economy works. Trump’s “liberation day” speech on tariffs gave the looney, but unmistakable, impression that he believes that Vietnam, for instance, is looting and pillaging the US by selling more sneakers and other goods to the US than the US sells to Vietnam. Trump thinks this even though millions of Americans are delighted to buy well-made sneakers from Vietnam (which would cost consumers far more if they were made in the US).With his grievance-driven, zero-sum worldview, Trump no doubt believes that other countries are unfairly taking advantage of the US whenever we trade with them – and he wants to get even.Trump thinks that trade deficits are evil. If Trump had taken a class with Robert Solow, a Nobel Prize-winning economist at MIT, he might have heard Solow’s wisdom about why there’s no big worry about bilateral trade deficits: “I have a chronic deficit with my barber, who doesn’t buy a darned thing from me.”That Trump got to impose his calamitous tariffs at 12.01am on Wednesday reflects the dismal quality of his cabinet and advisers. Too many are lackeys who automatically cheer whatever he does, while some others, like the treasury secretary, Scott Bessent, no doubt realized that his tariffs were dumb and disastrous, but they’re too cowardly to tell the Tariff King. The tariffs would inevitably increase inflation and probably push the US into recession. Even though Republicans have vowed never to raise taxes, Trump’s tariffs are unarguably a tax, a regressive tax and the largest tax increase in 60 years. Trump’s tariffs were bound to destroy smoothly running supply chains and hurt untold numbers of US companies. They were also a disaster for relations with our allies. They were already triggering massive retaliation.If Trump had some smart, principled advisers, they might explain to him that many obstacles might prevent his tariffs from achieving their goals. With the nation’s low 4% unemployment rate, it will be hard to find workers to do the manufacturing jobs that Trump wants to bring back, especially when he’s rounding up and expelling many immigrant workers. Moreover, US corporations have largely lost the technological knowhow to compete in various industries and that complicates hopes to bring back far more factories.Then there’s another big problem – the chaotic Trump is the worst possible president to persuade companies to build factories in the US to produce goods they now obtain from abroad. King Donald the Capricious does not exactly exude the air of stability that executives insist on before they decide to make big investment decisions, like building new factories.Trump trumpeted his tariffs in part to show strength, but he ended up in an embarrassing retreat (he did maintain a 10% tariff on many countries). Trump is eager to get China to heed his wishes, but China, the world’s leading manufacturing country, can now see that Trump will back down when the heat is too great.China doesn’t have clean hands on trade. It improperly subsidizes many industries to help them outcompete manufacturers in the US and elsewhere. China also has ambitions to vastly increase its manufacturing capacity – a strategy that could kill off important industries in the US, Canada, Europe, Japan and other countries. If Trump were smart and strategic, he – instead of alienating those countries with his tariffs – would have formed an alliance with those countries to pressure China. But now those countries are too angry at the Trump to do that.Trump, never one to admit defeat, insists that his climbdown was a victory, that the mess he made was marvelous strategy. He says many countries are eager to make deals with him. “I’m telling you, these countries are calling us up, kissing my ass,” he said on Wednesday. “They are dying to make a deal.”Our allies are no doubt furious with Trump. Not only were they already angry that he stabbed Ukraine in the back and sidled up to Putin, but they’re unhappy that his tariff foolishness violated numerous international agreements and sought to blow up a smoothly running trade system. And then Trump ridicules them by saying they were rushing to kiss his behind.I hardly ever agree with Elon Musk, but he was right that Trump’s tariffs were the work of morons who were “dumber than a sack of bricks”.

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

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      China raises tariffs on US goods to 125% as Xi urges EU to resist Trump ‘bullying’

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      China has raised its tariffs on US products to 125% in the latest salvo of the trade dispute with Washington, just hours after Xi Jinping said there were “no winners in a tariff war”.Xi made the comments during a meeting with the Spanish prime minister in which he invited the EU to work with China to resist “bullying”, part of an apparent campaign to shore up other trading partners.The Chinese commerce ministry announced on Friday that it was raising the 84% tariffs on all US imports to 125%, again saying that China was ready to “fight to the end”. The statement also suggested it may be Beijing’s last move in the tit-for-tat tariff raises as “at the current tariff level, there is no market acceptance for US goods exported to China”.“If the US continues to impose tariffs on Chinese goods exported to the US, China will ignore it,” it said, flagging that there were other countermeasures to come.Some markets continued to tumble on Friday, as the French president, Emmanuel Macron, described the US president’s 90-day tariff pause – which sets most tariffs at 10% until July – as “fragile”.Asian indices followed Wall Street lower on Friday, with Japan’s Nikkei down nearly 5% and Hong Kong stocks heading towards the biggest weekly decline since 2008. Oil prices were also expected to drop for a second consecutive week.Chinese officials have been canvassing other trading partners about how to deal with the US tariffs, after the country was excluded from Trump’s 90-day pause of the steepest global tariffs. Instead the US president made consecutive increases to duties on Chinese imports, which are now 145%.On Friday, Xi welcomed Spain’s Pedro Sánchez, after also talking to counterparts in Saudi Arabia and South Africa. According to the official Chinese summary of the talks, Xi said “there will be no winners in a tariff war, and going against the world will isolate oneself”, in an apparent reference to the US.“China and the EU should fulfil their international responsibilities, jointly maintain the trend of economic globalisation and the international trade environment, and jointly resist unilateral bullying, not only to safeguard their own legitimate rights and interests, but also to safeguard international fairness and justice, and to safeguard international rules and order,” the summary said Xi told Sánchez.Spain said Sánchez told Xi his country favoured a more balanced relationship between the EU and China based on negotiations to resolve differences and cooperation in areas of common interest.Xi plans to travel to south-east Asia, including Vietnam and Cambodia, next week.Macron wrote on X early on Friday that Trump’s partial tariff suspension, pausing new rates on various countries that would have risen as high as 50%, “sends out a signal and leaves the door open for talks. But this pause is a fragile one.”He added: “This 90-day pause means 90 days of uncertainty for all our businesses, on both sides of the Atlantic and beyond.”Battered financial markets were given a brief reprieve on Wednesday when Trump decided to pause duties on dozens of countries. However, his escalating trade dispute with China, the world’s second-largest economy, has continued to fuel fears of recession and further retaliation.The US treasury secretary, Scott Bessent, tried to assuage the fears of sceptics by telling a cabinet meeting on Thursday that more than 75 countries wanted to start trade negotiations, and Trump had expressed hope of a deal with China.But the uncertainty in the meantime extended some of the most volatile trading since the early days of the Covid-19 pandemic.The US’s S&P 500 index ended 3.5% lower on Thursday and was now down about 15% from its all-time peak in February. Some analysts believe stocks have further to fall owing to the uncertainty surrounding the US tariff policy.Bessent shrugged off the renewed market sell-off on Thursday and predicted that striking deals with other countries would bring more certainty.The US and Vietnam agreed to begin formal trade talks after Bessent spoke to the Vietnamese deputy prime minister, Ho Duc Phoc, the White House said.The south-east Asian manufacturing hub is prepared to crack down on Chinese goods being shipped to the US via its territory in the hope of avoiding tariffs, Reuters reported on Friday.Taiwan’s president said his government would also be among the first batch of trading partners to enter negotiations. Taiwan, listed for a 32% tariff, has offered zero tariffs as a basis for talks.Japan’s prime minister, Shigeru Ishiba, meanwhile, has set up a taskforce led by his close aide that hopes to visit Washington next week, according to local media.View image in fullscreenWhile Trump suddenly paused his “reciprocal” tariffs on other countries hours after they came into effect this week, he did not include China, instead increasing duties on Chinese imports as punishment for Beijing’s initial move to retaliate.Trump had imposed tariffs on Chinese goods of 145% since taking office, a White House official said.Meanwhile, Trump told reporters at the White House he thought the US could make a deal with China, but he reiterated his argument that Beijing had “really taken advantage” of the US for a long time.“I’m sure that we’ll be able to get along very well,” the US president said, referring to Xi. “In a true sense, he’s been a friend of mine for a long period of time, and I think that we’ll end up working out something that’s very good for both countries.”Xi and Trump are not known to have spoken since before Trump’s inauguration. Beijing has said it has no intention of backing down to what it terms as Trump’s “bullying” with the tariffs.“We will never sit idly by and watch while the legitimate rights and interests of the Chinese people are infringed, nor will we sit idly by as international economic and trade rules and the multilateral trading system are undermined,” the Chinese foreign ministry spokesperson, Lin Jian, said on Thursday.As well as retaliatory tariffs, Beijing has also restricted imports of Hollywood films, and put 18 US companies on trade restriction lists.The commerce ministry said China’s door was open to dialogue but this must be based on mutual respect.The US tariff pause also does not apply to duties paid by Canada and Mexico, whose goods are still subject to 25% fentanyl-related tariffs unless they comply with the US-Mexico-Canada trade agreement’s rules of origin.With trade hostilities persisting among the top three US trade partners, Goldman Sachs estimates the probability of a recession at 45%.Even with the rollback, the overall average import duty rate imposed by the US is the highest in more than a century, according to Yale University researchers.It also did little to soothe business leaders’ worries about the fallout from Trump’s trade dispute and its chaotic implementation: soaring costs, falling orders and snarled supply chains.One reprieve came, however, when the EU said it would pause its first counter-tariffs. 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      Thursday briefing: Trump puts global tariffs on pause – but hikes them for China

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      Good morning. Two main pieces of news from Donald Trump yesterday: he has rolled back water efficiency standards to “make America’s showers great again”, because he likes “to take a nice shower to take care of my beautiful hair”; and he has rolled back the exorbitant tariffs he applied to many countries last week to 10% – but increased them for China. “No longer will showerheads be weak and worthless,” the White House said. This will come as welcome news for the many investors who have recently been taking a bath.It was a pretty chaotic change, all told: there were contradictory messages from Trump’s advisers on which countries would be affected, why he did it, and what Beijing should expect to happen next. Still, the markets breathed a large sigh of relief, and the S&P 500 had one of the strongest days of its postwar history. This morning, share indices in Asia have jumped in turn.But that still isn’t enough to undo the full damage that Trump’s hot-and-cold tariff policy has inflicted on the American and global economy – and only a fool would presume that a more settled approach is now a given. For the very latest, head to the business live blog; today’s newsletter explains what’s going on, and whether the reversal is a sign of strength or weakness. Here are the headlines.Five big stories

      Gaza | Israeli aircraft struck a residential block in war-ravaged northern Gaza on Wednesday, killing at least 23 people, including eight women and eight children health officials said, as the Israeli military is reportedly preparing to seize the entire city of Rafah.

      Trade | The UK and India have agreed 90% of their free trade agreement, businesses were told on a call with negotiators this week. There are hopes the UK government will succeed in finalising a highly coveted trade deal with India, a booming economy of 1.4 billion people, this year.

      Smartphones | Almost all schools in England have banned mobile phone use by pupils, according to a survey run by Rachel de Souza, the children’s commissioner for England. Among 15,000 schools, 99.8% of primaries and 90% of secondaries have some form of ban.

      Defence | Hot weather is expected to bring highs of 24C to the UK as fire services continue to warn of wildfires across the country. The Met Office said temperatures would peak on Friday in London and south-east England, which could make it the hottest day of the year so far, while temperatures could hit 23C on Thursday.

      BBC | A controversial sculpture outside the BBC’s headquarters has been restored and put back on display behind a screen after being vandalised, with the corporation saying it in no way condoned the “abusive behaviour” of its creator, Eric Gill. There have long been calls for Gill’s works to be removed since his diaries revealed he had sexually abused his two eldest daughters.
      In depth: ‘THIS IS A GREAT TIME TO BUY!!!’View image in fullscreenAt 9.37am Eastern Time, Donald Trump advised his followers with an appetite for speculation: “THIS IS A GREAT TIME TO BUY!!!” Less than four hours later, in what Treasury secretary Scott Bessent magnificently described as “one of the most extraordinary Truth posts of his Presidency,” he announced the rollback of his tariff policy, and the market duly soared. Is it insider trading if your source is the president?Anyway, as the dust settled, traders kept buying. That was claimed as a major victory by Trump: “It’s up almost 2,500 points,” he said. “Nobody’s ever heard of it. It’s got to be a record.” But the reality is that the mood of uncertainty he has created will not easily be dispelled.What does the US tariff regime look like now?With the caveat that this is liable to change at any moment even though everyone in the White House is now asleep, here’s where things now stand: China’s tariff was raised to 125%, which means – given an existing 25% tariff – that some goods are now subject to an additional 150% rate. That is massively up on the 34% Trump announced last week. With a new 84% tariff in response yesterday, Trump again said that Beijing has been “ripping off the USA”. Every other country which saw its tariff raised above the baseline 10% in Trump’s “liberation day” announcement has seen the rate dialled back to that 10%. So no change for the UK; a very significant change for Vietnam (46%), India (26%), the European Union (20%), and the Falkland Islands (41%), whose 3,600 residents can now resume selling Americans frozen fish. Trump initially claimed that this was because more than 75 countries, of 190 affected, had sought to negotiate a deal without retaliating. The higher tariffs are paused for 90 days, and could be reimposed or increased again. There was some confusion over what would happen to Mexico and Canada, whose tariffs were not included in the announcement last week because they had already been set as high as 25% on a large proportion of their exports. Scott Bessent said the 10% rate would apply to them too; the White House later contradicted him and said that their tariffs would remain unchanged.Where does this leave China?In truth, the new announcement doesn’t change much. With tariffs that high, Trump might as well set them to a gazillion per cent and demand every import comes with a free Fabergé egg: the additional rate will make a minimal difference, because hardly anyone will be exporting anything from China to the US. The World Trade Organization forecast yesterday that trade between the two countries could drop by 80%, or $466bn a year.So is the goal to tank the Chinese economy, or to force China to negotiate? That was unclear yesterday. Bessent praised Trump for “goading China into a bad position” so that they “showed themselves to the world to be the bad actor”. That would seem to imply the tank strategy. But Trump himself took a much sunnier line later on: he told reporters that president Xi Jinping “is a smart guy and we’ll end up making a very good deal.”It is certainly plausible that the two sides will eventually arrive at some figure that both can present as a victory domestically. But as Amy Hawkins writes in this piece, that is unlikely to be on the basis of a major Chinese retreat. That is partly because Chinese exports to the US are largely consumer goods, badly exposed to eye-watering price increases, while the goods going the other way are commodities whose expense can be at least somewhat absorbed before they reach the consumer market.What about the UK?In one sense, the UK is exactly where it started: because it was already on the lowest 10% rate, nothing has changed. On the other hand, the fact that 10% is now the same rate as almost everyone else erases the comparative advantage that has been presented as a bright side.Speaking to ITV before the latest announcement, Keir Starmer reiterated that “a trade war is in nobody’s interest” but that retaliatory measures remained on the table. He also acknowledged that it was impossible to know if the 10% will ever be removed. In this piece, Rowena Mason reports that Whitehall sources are “increasingly downbeat” about striking a deal to reduce the tariffs.Why did Trump do it?That depends on who you ask. White House press secretary Karoline Leavitt implied that the change was part of a long-term strategy, saying that reporters had “clearly missed the art of the deal” and “failed to see what President Trump is doing here”. Bessent claimed similarly that this had been Trump’s “strategy all along”. And Trump advisor Stephen Miller claimed it was “the greatest economic master strategy from an American president in history”.But those confident assertions looked a bit shakier when Trump himself emerged to speak to reporters and said that he was acting in a “flexible” way, and that he reacted because “people … were getting a little bit yippy, a little bit afraid”. He also said that “A lot of times it’s not a negotiation until it is”, so make of that what you will. As for what he does next: that will be based on “instinct”, he said.The economist Mohamed El-Erian suggested that Trump was responding above all to a major sell-off in US government debt, a dangerous sign of investor scepticism of the US since its bonds are generally viewed as a safe harbour in an economic storm. The New York Times reports that Bessent and other advisors emphasised the issue in a meeting with Trump yesterday morning. But if you concluded that Trump may just as easily have made a capricious choice based on no serious rationale at all, you wouldn’t sound like an idiot.Where does this leave the markets – and the wider global economic outlook?In the context of the last week, this was a euphoric day for traders. The S&P 500 rose 9.5%, its biggest single-day climb since 2008; 494 of the 500 stocks covered ended higher than they began. One index of the improving mood was Goldman Sachs’ decision to rescind their recession forecast within hours of making it. Overnight, Asian markets have also climbed, and futures – a way to bet on prices ahead of markets opening – were up for European stocks and the FTSE 100.On the other hand, the S&P 500 is still down a significant 11.2% on where it was in February – and 10% universal tariffs are still a really big deal. Bob Elliott, a prominent hedge fund manager, said the market response was “likely far too positive” and noted that when taken alongside the Chinese rate and sector-specific rates elsewhere, the effective overall rate on imports is closer to 20%. That is only down 5% on where it stood before Trump’s announcement, and higher than it has been since the 1930s.The China tariffs alone could lead to a long term reduction in global GDP by nearly 7%, the WTO estimated. And when the dust settles, many companies will still be deeply sceptical that they can count on the kind of stability that tends to promote investment, new hiring, and economic growth.For now, the next questions are whether deals start to be struck, and whether improving share prices are the start of a sustained recovery or merely a “relief rally”. Jake Schurmeier, a portfolio manager at Harbor Capital Advisors, told Bloomberg: “Good news doesn’t eliminate the overarching uncertainty. We [will] likely go higher for a few days, but I think permanent damage has been done.”skip past newsletter promotionafter newsletter promotionWhat else we’ve been readingView image in fullscreen

      Richard Wright (above) once painted 47,000 stars on the ceiling of Amsterdam’s Rijksmuseum. Charlotte Higgins talks to the Turner prize-winning artist about his gorgeous, insanely intricate work – which he describes as “torture”. Alex Needham, acting head of newsletters

      Amazon’s prestige drama about Jesus Christ, The Chosen, claims to have reached 280 million viewers – and it’s just the tip of the holy iceberg. Steve Rose has a great piece about how the Messiah became TV and box office gold. Archie

      Could New York ever have a democratic socialist mayor? The city’s residents could, in the unlikely event they vote for Zohran Mamdani. He’s offering a rent freeze, free buses and universal childcare. For Interview magazine, 18 New Yorkers grill him. Alex

      Alice Wilkinson has lived in eight houseshares, and has the stories to show for it. They are compulsively readable, especially the one about the housemate who stole all the cutlery. Archie

      The speed of Trump’s transformation (or degradation) of America has been breathtaking. Osita Nwanevu steps back and surveys the epic scale of the damage: “Humiliation, immiseration, chaos and more of all to come.” Alex
      SportView image in fullscreenFootball | A late goal for Nuno Mendes (above) gave Paris St-Germain a two-goal cushion in their Champions League quarter-final tie against Aston Villa. The 3-1 victory in the first leg came despite Morgan Rogers’ 35th minute opener for the visitors. In the night’s other first leg match, Barcelona beat Dortmund 4-0.Football | Liverpool are increasingly confident Mohamed Salah will sign a contract extension beyond this summer after progress in talks over recent weeks. It is a significant boost with the captain, Virgil van Dijk, also likely to extend his stay beyond June.The boat race | The bad blood between Oxford and Cambridge continues to fester in the buildup to Sunday’s University Boat Race, with fallout from the row over a ban on PGCE students competing leading to the abandonment of the women’s trial race on Wednesday morning.The front pagesView image in fullscreenTrump’s 90-day pause on tariffs dominate the front pages today. The Guardian splashes on “Trump pauses global trade war but hits China with 125% tariffs”, the Times leads with “Trump puts the brakes on tariffs for 90 days” and the Daily Telegraph has “Trump blinks first in trade war”. The FT is going with “Stocks soar as Trump presses tariffs pause button and hits China harder”, the Mail leads with “Trump blinks … but doubles down on China” and the Metro has “Trump risks the great maul of China”. In the Mirror, it’s “Great War of China”.In the Express, it’s “Kemi: PM must make more of our Brexit freedoms.” And the Sun runs with a story about Chelsea footballer Moises Caicedo allegedly driving without a licence, and “Police in swoop on £115m Chelsea ace”.Today in FocusView image in fullscreenRats, rubbish and rising taxes: why Birmingham stinks right nowWhy have the city’s bin collectors gone on strike? Jessica Murray reportsCartoon of the day | Ben JenningsView image in fullscreenThe UpsideA bit of good news to remind you that the world’s not all badView image in fullscreenMetuktire, a village in the Indigenous Capoto-Jarina territory in the Brazilian Amazon , stands as a stronghold against logging and mining in the rainforest. The village has preserved its traditional ways while embracing sustainable energy through solar panels.The community actively resists illegal intrusion by patrolling their territory and educating younger generations on environmental protection. They maintain their customs, such as harvesting cassava, while adopting modern conveniences such as mobile phones and solar panels (pictured above).Chief Beptok Metuktire remains a beacon of resilience fiercely defending the local heritage. “We have had goldminers and outsiders who wanted to occupy our lands,” he says. “We show them that this is our territory.”Bored at work?And finally, the Guardian’s puzzles are here to keep you entertained throughout the day. Until tomorrow.

      Quick crossword

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      ‘Go Trump’: Florida shoppers back tariffs – but others are worried

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      In Gainesville, Florida, a small city in the north-central part of the state, small businesses and shoppers are bracing for the impacts of Trump’s sweeping tariffs.The Trump administration announced a baseline of 10% tariffs on nearly every country in the world last week, with much higher rates on countries such as China, Taiwan and Vietnam, and 20% tariffs on European Union countries.The tariffs are expected to increase prices on household goods, clothing, electronics and groceries; the Budget Lab at Yale University reported the tariffs could cost the average US household $3,800.As criticism of the tariffs has mounted, the White House has touted support for the tariffs from “everyday Americans”. And in Gainesville, that message seems to have worked – for now.“Make America great again,” said Justin Godwin, an electrical contractor in Ocala, Florida, just south of Gainesville. “We are not the world police, nor are we the global providers of welfare.”Kim Roberts Rogel, a retiree in Lakeland, Florida, added: “Go, Trump. He’s a businessman and knows exactly what he is doing.”Samantha Gore, a stay-at-home mom in Interlachen, Florida, just west of Gainesville, repeated a claim from Trump that Canada has 250% tariffs on some products, though the truth is more complicated: there are also zero tariffs on thousands of metric tons of US dairy that Canada imports, thanks to a deal brokered by Trump in his first administration, and the US dairy industry isn’t reaching the levels of import quotas on any dairy products to receive the maximum tariffs from Canada.“Why is it OK for the rest of the world to charge us, but when we start doing the same, everyone has a fit? This is a short-term sacrifice for long-term gain,” Gore said. “The gain will be for the American people because this will bring back better-paying jobs, better-quality goods, not China-sweatshop or slave-labor goods, and it will keep our money in our economy instead of sending it overseas.”But others are worried. And nationally, consumer and small-business confidence is falling as the tariffs loom.Gainesville, home to the University of Florida, with a population of just more than 145,000, is a blue dot surrounded by counties that voted for Trump. Trump won the state in 2024 by 13.1% points.View image in fullscreenGainesville, along with Tallahassee, Orlando, Broward and Palm Beach counties in southern Florida, had among the last vestiges of Democratic support in the 2024 election, as the state trended from a swing state that Barack Obama won in 2008 and 2012 to a Republican stronghold.“As far as shopping goes, we have cut back considerably on spending for several months,” said 74-year-old Cynthia Bertelsen of Gainesville, who is fearful of a looming economic recession and anticipating price increases on coffee, olive oil, paper products, wine and other food items.“Trump’s unyielding stance on the tariffs has caused my family to lose money we can ill afford to lose.”Grocery prices in Florida are among the highest in the US, ranking fifth out of 50 states in a 2024 analysis of US Census Bureau data.skip past newsletter promotionafter newsletter promotion“Prices are already too high,” said Sammie Bartz of Gainesville, who said they’ve been pre-buying their kids’ clothing for the next school year from Shein, as well as some electronics. “I’m done spending for a while on anything that is not absolutely essential.”Sweetwater Organic Coffee Company, a coffee-roasting company based in Gainesville that supplies coffee to several grocery stores, coffee shops and restaurants in the area, was already anticipating having to hike prices as coffee costs had just hit a record high before the tariffs were enacted.“All of our fellow importers with whom I have spoken will be passing the cost of tariffs along to their roastery clients. Our margins at the importing and roasting point in the supply chain are quite slim in normal times, and I know no one who will or can absorb these tariff costs on behalf of the next point in the supply chain,” said Bill Harris, chief financial officer of Sweetwater.Harris explained the company had been in the process of adding $0.60-$1.20 per pound of coffee to wholesale prices before the tariffs, noting the tariff taxes will have to be passed along, with at least $1-$3 per pound added for high-tariff origin coffees from Indonesia, Laos and Nicaragua.Coffee can only be grown in tropical climates and is often sourced from developing countries, several of which have received higher tariff rates, such as Indonesia at 32%, Nicaragua at 18% and Laos at 48%.“Everyone that I have spoken to about these tariffs in our industry feels that this administration’s chaotic ‘liberation day’ tariff rollout is only hurting importers, roasters and thousands of coffee shops across the country, which were already struggling due to the unprecedented rise in coffee prices and the uncertainty and disruptions created by this administration’s first three months in office,” added Harris.“The net result of our president’s short-sighted tax grab is inflation for consumers, destabilizing our supply relationships and added stress on thousands of coffee businesses that were already struggling.” More

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      Trump threatens additional 50% tariffs on China over retaliatory levies

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      Donald Trump has threatened to impose an additional 50% tariff on imports from China on Wednesday unless the country rescinds its retaliatory tariffs on the United States by Tuesday.The news comes on the third day of catastrophic market falls around the globe since Trump announced his trade war last Wednesday with tariffs on the US’s trading partners.As part of that move the White House announced it would impose a 34% tariff on Chinese imports. In response, Beijing announced a 34% tariff on US imports.In a statement on Truth Social on Monday morning, the US president said that China enacted the retaliatory tariffs despite his “warning that any country that Retaliates against the U.S. by issuing additional Tariffs” would be “immediately met with new and substantially higher Tariffs, over and above those initially set”.“If China does not withdraw its 34% increase above their already long term trading abuses by tomorrow, April 8th, 2025, the United States will impose ADDITIONAL Tariffs on China of 50%, effective April 9th,” Trump wrote.“Additionally, all talks with China concerning their requested meetings with us will be terminated!” he added. “Negotiations with other countries, which have also requested meetings, will begin taking place immediately.”China’s US embassy said on Monday it would not cave to pressure or threats over the additional 50% tariffs. “We have stressed more than once that pressuring or threatening China is not a right way to engage with us. China will firmly safeguard its legitimate rights and interests,” Liu Pengyu, an embassy spokesman, told Agence France-Presse.A senior White House official told ABC News that the increased tariffs on China would be on top of the 34% reciprocal tariff Trump announced last week and the 20% already in place.Trump’s new ultimatum to China marked the latest escalation from the White House and came as US stocks swung in and out of the red on Monday morning as a report circulated that Trump was going to pause the implementation of his sweeping tariffs for 90 days, but then was quickly dismissed by the White House as “fake news”.Not long after Trump threatened China with additional tariffs on Monday morning, he participated in a White House visit from the Los Angeles Dodgers to celebrate their World Series title. More

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      Rightwing group backed by Koch and Leo sues to stop Trump tariffs

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      A libertarian group backed by Leonard Leo and Charles Koch has mounted a legal challenge against Donald Trump’s tariff regime, in a sign of spreading rightwing opposition to a policy that has sent international markets plummeting.The New Civil Liberties Alliance filed a suit against Trump’s imposition of import tariffs on exports from China, arguing that doing so under the International Emergency Economic Powers Act (IEEPA) – which the president has invoked to justify the duties on nearly all countries – is unlawful.The group’s actions echo support given by four Republican senators last week for a Democratic amendment calling for the reversal of 25% tariffs imposed on Canada.Last Wednesday’s amendment passed with the support of Mitch McConnell, the former Republican Senate majority leader, and his fellow GOP members Rand Paul, Susan Collins and Lisa Murkowski, who argued that tariffs on Canada would be economically harmful.The action from the alliance has the potential to be even more emblematic, given its backing from Koch, a billionaire industrialist, and Leo, a wealthy legal activist who advised Trump on the nomination of three conservative supreme court justices during his first presidency, which has given the court a 6-3 rightwing majority. The group received money from organisations affiliated with Leo and Koch in 2022.The alliance has tabled its action on behalf of Simplified, a Florida-based home goods company whose business is heavily reliant on imports from China. It argues that the president has exceeded his powers in invoking the IEEPA to justify tariffs.“This statute authorizes specific emergency actions like imposing sanctions or freezing assets to protect the United States from foreign threats,” the alliance said in a statement. “It does not authorize the president to impose tariffs. In its nearly 50-year history, no other president – including President Trump in his first term – has ever tried to use the IEEPA to impose tariffs.”The alliance also argues that power to impose tariffs lies not with a sitting president, but with Congress, and warns that those imposed by Trump could run afoul of US supreme court rulings.“His attempt to use the IEEPA this way not only violates the law as written, but it also invites application of the supreme court’s major questions doctrine, which tells courts not to discern policies of ‘vast economic and political significance’ in a law without explicit congressional authorization,” its statement said.Mark Chenoweth, the alliance’s president, said the court in Pensacola – where the suit has been filed – would have to observe this legal precedent.“Reading this law [IEEPA] broadly enough to uphold the China tariff would transfer core legislative power,” he said. “To avoid that non-delegation pitfall, the court must construe the statute consistent with nearly 50 years of unbroken practice and decide it does not permit tariff setting.”The suit argues that there is no connection between the fentanyl epidemic – which Trump has cited as a reason for invoking the emergency powers – and the tariffs.“The means of an across-the-board tariff does not fit the end of stopping an influx of opioids, and is in no sense ‘necessary’ to that stated purpose,” the complaint filed on behalf of Simplified argues.“In fact, President Trump’s own statements reveal the real reason for the China tariff, which is to reduce American trade deficits while raising federal revenue.”The legal case adds to rumbling disquiet on tariffs among some of Trump’s usually vocal supporters, including the billionaire hedge fund manager Bill Ackman.Paul, a senator from Kentucky who has been one of the most consistent congressional anti-tariff voices, told the Washington Post that other Capitol Hill Republicans shared his concern.“They all see the stock market, and they’re all worried about it,” Paul said. “But they are putting on a stiff upper lip to try to act as if nothing’s happening and hoping it goes away.”Speaking in support of last week’s Democratic amendment, sponsored by the Virginia senator Tim Kaine, Paul said: “I don’t care if the president is a Republican or a Democrat. I don’t want to live under emergency rule. I don’t want to live where my representatives cannot speak for me and have a check and balance on power.”Trump attacked Paul and the three other Republican senators who backed the amendment and suggested they were driven by “Trump derangement syndrome”.In another sign of Republican concern, the GOP senator from Iowa Chuck Grassley – along with a Washington Democrat, Maria Cantrell – introduced a bill that would limit Trump’s ability to impose or increase tariffs by requiring Congress to approve them within 60 days. The White House budget office said on Monday that Trump would veto the bill. More