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      After America: can Europe learn to go it alone without the US?

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      The German ­electronics firm Hensoldt has a backlog of orders for its technology, ­including radars that protect Ukraine from Russian airstrikes. Meanwhile, Germany’s car industry is struggling with low European demand and competition from China.As Europe worries about how it can weather the economic and ­political turmoil unleashed by Donald Trump, executives from Munich and Düsseldorf say they have at least a partial answer.In January, Hensoldt offered to take on workers laid off by the car parts suppliers Bosch and Continental. The defence giant Rheinmetall made a similar ­proposal last year, and in February announced it would repurpose two automotive component factories.It was a pivot that offered hope amid America’s rapid ­dismantling of the postwar global order – ­protecting jobs and Germany’s industrial base as access to US ­markets shrinks, while ramping up Europe’s capacity to protect itself.As politicians around the world try to work out how best to ­protect their countries from Trump’s ­capricious policymaking, the one constant in all their calculations for the future is a diminished American role in their countries. Trump has mooted plans for a 25% tariff on EU goods, including cars, and has already put duties at that level on steel and aluminium from the bloc.In February, his vice-president, JD Vance, launched a blistering attack on European democracy in Munich, questioning whether it was worth defending.In his first term, Trump touted decoupling from China as a way to bolster US jobs and the economy against a rapacious rival. Now, in his second term, he is pursuing a much broader decoupling from the ­country’s historical allies – a shift that few had anticipated or were prepared to face.The new US administration is sealing off its markets, retreating from America’s global security role, and cutting soft-power projects that aimed to shape the world through research, aid and culture.The only form of greater American presence beyond the country’s ­current borders that seems to ­interest Trump is ­territorial ­expansion – ­encouraging, ­perhaps, for a dictator such as Vladimir Putin as he wages an ­imperial war in Ukraine, but ­unwelcome and ­alarming elsewhere.“The idea of the US ­abandoning western Europe was ­unimaginable even a decade ago, because its role there also secures broader American influence in the world,” said Phillip Ayoub, a professor of international relations at University College London.“There is a comparative ­advantage to strong alliances because they make you richer in trade and safer because they deter other powers.”Trump’s vision of the world rejects that view, casting his ­country as a naively magnanimous ­superpower that has for decades funded and policed the world while getting little more than debt and ingratitude for its troubles.View image in fullscreenYet if postwar American ­presidents did not pursue the ­territorial empire that Trump now dreams of, they wielded an ­imperial power not reflected on maps. Decisions made in Washington DC reshaped countries from Chile to Iraq without the participation or consent of their populations.And the global order he is ­tearing down made the country so rich and powerful that for a brief, heady moment around the turn of the ­millennium, the US elite embraced the idea that history was over, and that human society had reached its peak and permanent form in the ­liberal democracy embodied in their constitution.The details of the new American relationship with the world are still being worked out day by day in court battles at home and trade and diplomatic negotiations abroad, but the impact of Trump’s presidency will last long into the future.“An election could change ­policy in Washington DC. But the new ­reality is that from government to government you could have a ­different attitude to the US’s place in the world,” Ayoub said. “This retreat will be factored into policymaking everywhere now.”For now, the ­immediate priority in most ­countries is limiting the extent of tariffs and the impact of US cuts, in areas ranging from aid to defence.Geography and the impact of ­previous free trade deals have ­combined to make neighbours of the US extremely vulnerable to its tariffs. Exports to the US account for a quarter of Mexico’s GDP. In Canada, where all other potential trading partners are an ocean or half a continent away, they are about a fifth of GDP.European countries may be less immediately vulnerable to a trade squeeze, with exports to the US accounting for less than 3% of the European Union’s GDP.But budgets from London to Warsaw are also strained by the need to ramp up defence ­spending to make up for the US retreat, both from immediate support for the Ukrainian forces battling Russia, and from the longer-term backing of European defence. Even ­optimistic assessments suggest it will take the best part of a decade before the continent’s own defence ­capacity can match the protection currently offered by the US, excluding its nuclear deterrent.The pain of breaking up or reshaping major relationships does not only fall on one party – ­something even Trump has ­admitted. The cost of some tariffs will be passed on to US ­consumers, and American businesses may lose customers.One early high-profile casualty could be Lockheed Martin, which produces F-35 jet fighters. Contracts allowing the US to restrict how the planes are used by allies caused little debate during friendlier times. Now, in Berlin and other capitals, defence ministers are worrying about a ­possible “kill switch” and hesitating over major new orders.Longer term, Trump could also fuel a ­cultural “decoupling”, with attacks on the arts and academia ­driving highly talented ­individuals to flee the US or avoid it.Several artists have cancelled tours, and the concert pianist András Schiff last week said last week he would no longer work in the US because of Trump. He had already boycotted Russia.Academics at elite British ­universities say they have seen a surge in job applications from US-based colleagues, many ­willing to lose tenure and take a ­considerable pay cut in order to move across the Atlantic. A French university that offered ­“sanctuary” to US researchers said it had received 40 applications, and one academic moved this month.As with the economy, the US’s ­cultural standing is not under direct threat. American music – much of it made by ­people who publicly oppose Trump – will be consumed worldwide. The Oscars are likely to remain the most ­coveted prize for cinema, the Emmys for ­television, the Pulitzers for ­journalism. Yet an exodus would still be ­damaging in a country where research and the creative arts are key drivers of growth, and benefit the places they settle instead – the long-term US allies that Trump sees as threats.The US president has promised voters that where his economic policies cause pain it will be short-term, and pave the way for long term prosperity in America.To critics, they look like a ­template for a poorer, more ­dangerous and fragmented world, where any limited benefits of ­decoupling are as likely to be reaped by a British university or a German defence firm as by Americans.View image in fullscreenCultureThe hit to America’s creative ­sector, from budget freezes and threats to the federal bodies and national schemes that fund ­museums, ­galleries, theatres and libraries, is set to take a toll on its income from tourism – and send visitors to Britain and Europe instead.In response to the second Trump presidency, some international ­artists are already pulling out of ­appearances in American venues, or at music festivals, and the likely knock-on effect is a reduction in ­visits from abroad.Last week, the Canadian singer/songwriter Leslie Hudson cancelled her American tour, saying on social media: “Like a lot of Canadians, and so many others, I no longer feel safe to enter the country.” The German violinist Christian Tetzlaff cancelled a spring tour in protest at the new administration’s policies, with particular reference to Ukraine.In Pittsburgh, Pennsylvania, the managing director of City theatre, James McNeel, has ­spoken of a growing funding threat. “What we need more than anything is stability,” he says.Prior to the pandemic, the US Travel Association ­valued the total spending of the near-80 million tourists who came into the US at about $2 trillion (£1.5tn).This was supported by federal investment in ­infrastructure and the ­airline industry, but travel experts also traced back much of this tourism success to the diverse image of many of its cities. Art tourism was a big part of this, with art fans who ­travelled to North America in 2023 ­accounting for more than a ­quarter of the global total. Cities such as New York, Los Angeles, and Chicago boast ­celebrated museums and ­galleries, and the rise of immersive art and public installations has broadened this appeal. The attraction of art fairs such as Art Basel Miami has also grown internationally. In 2023, it was reportedly visited by more than 79,000 people.But Trump has made rapid and determined cuts to all museum ­projects tied to diversity, equity and inclusion (DEI) initiatives, ­affecting the Smithsonian Institution, which has closed its DEI office. The National Gallery of Art also closed its office of belonging and inclusion, while exhibitions across the ­country have been cancelled. The biggest impact may well be on cultural ­tourism associated with LGBTQ+ communities and climate activism.Trump at one point intended for 2026 to be a bumper year for American tourism, with a ­“special one-time festival” planned for “­millions of people from around the world” at the Iowa State Fairground to mark 250 years since ­independence.The level of ­international advance booking will be watched.Likewise, a new status for London, Berlin and Paris as “refuge cities” for American artists is being predicted.British and European ­institutions might also soon have to make room for American artwork. The Washington Post has reported that large collections of public art have been left without professional ­security or conservationists.View image in fullscreenEconomicsShould the UK government decide to untangle the economy’s many ties with the US, it would need to tread carefully. America is the single ­largest market for Britain’s exports, ranging from the most sophisticated components in US navy submarines to artisan scented candles.Official figures show total trade in goods and services – exports plus imports – between Britain and the US was £294bn in the year to 30 September, 2024. The stock of investment by US companies in the UK stood at £708bn in 2023, or 34% of total of foreign direct investment.Jonathan Reynolds, the business secretary, is hoping to sign a limited trade deal with his counterparts in Washington that covers digital services and commits both countries to secure supply chains for vital goods.But a deal with any scope or ­judicial oversight will need Congress to agree, and that is far from certain to happen.UK manufacturers could begin to wean themselves off US raw ­materials and components, but the presumption must be that they traded with the Americans in the first place because they provided the best products. Exports could be directed back at the EU, though without rejoining the single ­market and customs union, the benefit would be limited.It would be a harder job switching services exports away from the US. The common language may often divide the two nations, but in ­practice the sector is a huge boon.In Brussels, officials believe any kind of trade deal with the US is off the agenda.As Donald Trump is only too well aware, the EU has a large trade ­surplus with America. In 2014 the surplus was about €100bn. By last year the gap had grown to almost €200bn. For this reason, the EU has already adopted a more ­confrontational stance.The British Chambers of Commerce says almost two-thirds of factory owners that export to the US are worried. European ­manufacturers have revealed similar concerns in recent surveys.Some are comforted by figures showing the US has a trade surplus in goods with the UK and how, in practice, trade and investment relationships exist well away from the White House and remain robust.However, businesses thought the same about Brussels after the vote to leave the EU. It didn’t happen and a breakdown in relations ensued.That said, rekindling relations with the EU can be part of the answer. Reset talks are under way and there is a leaders’ summit on 19 May that should address at least some trade barriers. The UK might find that food exports become easier and it gains access to a wider range of raw ­materials and ­components by rejoining the Pan-Euro-Mediterranean convention.Still, the US will remain a major trading partner and upsetting the Trump White House could have huge consequences.View image in fullscreenDefenceDonald Trump’s abandonment of Europe’s defence and disdain for Nato marks one of the most ­profound and influential breaks with longstanding US policy, even for a supremely disruptive leader.Many US presidents have grumbled about European over-reliance on American deterrence in recent decades, with predecessors including Barack Obama demanding allies spend more on their own armies.But their frustrations were rooted in concern that European defence cuts undermined an ­alliance that almost everyone in Washington – across the political divide – saw as critical to American global leadership.Trump, in contrast, appears to be seeking European spending to replace or supersede Nato, not strengthen it. He says Washington’s defence priorities are now deterring China in Asia and fighting organised crime at home.In his first term, he touted the idea of withdrawing America from the alliance, which was formed in 1949 for protection against the Soviet Union. This time he has opted to undermine it from within.The president himself has ­publicly contemplated ignoring Article 5, the core mutual defence clause at the heart of the transatlantic ­alliance, which requires Nato ­countries to come to the aid of any member that is attacked. It has only been invoked once – by the US after the 11 September attacks on Washington and New York in 2001.Trump said the US might ­condition any support for other members on military spending, and questioned if US allies would come to the country’s aid if in need. His administration is considering giving up the Nato command role inaugurated by war hero president Dwight D Eisenhower and held by America ever since, NBC reported last week.Europe was already scrambling to increase defence spending and ­coordination when the US halted military aid shipments to Ukraine, and intelligence-sharing with Kyiv earlier this month.Trump’s decision came after a spectacular on-camera showdown in the Oval Office with Ukraine’s president, Volodymyr Zelenskyy. But his willingness to cut loose a force that Washington has trained, armed and backed, and which is fighting a major US rival, stunned even some of his own political allies.European governments who have also spent billions on Ukraine’s defence, and have been dealing with covert Russian sabotage and spy operations across the continent, were not informed in advance.The flow of weapons and aid has now resumed, but the message was clear. Major European military powers, including the UK and Germany, are now reportedly racing to put together a five- to 10-year plan for a managed transfer of European defence, to stave off any more abrupt moves from Washington.Trump’s unpredictability has been heightened by his choice of ­leaders for key security roles, ­including a former Fox television host, Pete Hegseth, as defence secretary, and Tulsi Gabbard, who has a long ­history of pro-Russian views, as director of national intelligence.Security experts warn that ­turmoil in the leadership and ­management of intelligence agencies may also lead to a less visible but highly ­damaging defence decoupling – of the relationship between America’s spies and the secret services of its allies.View image in fullscreenDiplomacyThe votes in the United Nations marking the third anniversary of Russia’s invasion of Ukraine ­provided a bleak snapshot of the yawning diplomatic divide between Donald Trump’s America and the country’s traditional allies.On February 25, the US joined international pariahs Russia, Belarus and North Korea to vote against a resolution condemning Russia as an aggressor state and calling on it to remove its troops from Ukraine.The wording rejected by Trump’s diplomats had been put forward by Ukraine, whose defence the US has funded, and the European Union, Washington’s partner in that effort. It passed in the general assembly with backing from 93 countries.The isolationist bent of Trump’s politics extends beyond the ­economy and defence, into international diplomacy. He has ordered the US to withdraw from a host of global organisations and initiatives, from the World Health Organization to the Paris climate agreement.The process of taking the world’s second biggest emitter of planet-heating pollution out of the accord to tackle global ­emissions will take about a year. As with the UN vote on Ukraine, that move puts the world’s most ­powerful democracy in unusual ­company, with Iran, Libya and Yemen as the only countries outside the deal.Trump imposed sanctions on officials at the International Criminal Court over arrest warrants it had issued for the Israeli prime minister Benjamin Netanyahu and Yoav Gallant, who was the country’s defence minister at the time.His predecessor Joe Biden had also criticised the court, but such a direct attack on an institution ­established with broad international support was unprecedented.Several former British ambassadors to Washington warned this month that there has been a seismic and perhaps permanent shift in the so-called “special relationship” between the two countries, meaning that the UK will need to seek out other allies.“It’s difficult to find either a conceptual area in ­international relations or a particular geographical area where our interests are really converging at the moment,” Nigel Sheinwald, the ­ambassador from 2007 to 2012, told a ­parliamentary committee.“On more or less any big ­foreign policy issue that we’re dealing with today, we don’t agree with the United States… whether that is the Middle East, whether it’s Iran, whether it’s climate change, China, but above all on Europe itself,” Sheinwald said. 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      Is Trump driving the US into a recession? – in charts

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      Prospects for the US economy have cooled significantly in a matter of months. After outperforming its international peers last year, warning lights are flashing on a dashboard of economic indicators as analysts warn that Donald Trump’s erratic approach is hitting the world’s largest economy.Fears of a US recession this year are growing, in what is being called a “Trumpcession”, amid a sharp decline in business and consumer confidence as the president threatens punitive import tariffs on US allies and enemies alike.Most economists reckon a recession – defined as two consecutive quarters of shrinking economic output – can be avoided. But it is clear there are storm clouds gathering within the president’s first 100 days back in the White House.GDPUS growth in gross domestic product (GDP) had outpaced international peers in recent years, and since the Covid pandemic in particular – helped by the Biden administration pumping billions of dollars into the economy through the Inflation Reduction Act. The former president did not get much credit, though, as voters felt the squeeze from the period of high inflation triggered by the pandemic and Russia’s war in Ukraine.This week, the Atlanta Federal Reserve’s GDPNow, which measures GDP economic growth in real time, suggested the US economy would contract at an annual rate of 2% in the first quarter. However, this widely followed indicator can be volatile, and it is heavily influenced by the US trade deficit, which soared in January.Trade balanceThe US goods trade gap surged to $153.3bn in January. This was driven by record import volumes, an increase of $36.2bn to $329.5bn in total, as US businesses rushed to bring shipments into the country to avoid potential tariffs.US gold importsA significant driver of the import rise was inbound shipments of “finished metal shapes”, which include bars of gold. The trend is also attributed to traders rushing to get ahead of potential US tariffs. A widening trade deficit would normally weigh on a country’s GDP, because imports are subtracted from the measurement. But because gold bought to sit in a vault is not consumed or used in production, it is excluded.This means the Atlanta Fed is likely to be overestimating the hit to first-quarter GDP. Still, there are other signs that the US economy is cooling.InflationTrump had promised to “bring prices down, starting on day one” and “cut energy costs in half within 12 months after taking office”.Official figures show the headline annual rate as measured by the consumer price index was 2.8% in February, after an unexpected rise to 3% in January from 2.9% in December. Energy costs are down by 0.2% on an annual basis.The Organisation for Economic Co-operation and Development (OECD) said on Monday that Trump’s trade wars risked stoking inflation. It increased its US inflation forecast for 2025 to 2.8%, up from a previous estimate of 2.1% made in December.EmploymentThe US jobs market has boomed in recent years, and the unemployment rate dropped to 3.5% in early 2023, the lowest level since the year of the first moon landing in 1969. The rate has ticked higher in recent months, but remains historically low at 4.1%. This has been spurred by rapid growth in the numbers of jobs being added to the economy.Wage growth has also strengthened, and has remained above inflation since early 2023, helping households to rebuild some of their purchasing power lost during the recent rise in living costs.StocksThe US stock market has powered to record highs in recent years. Tech stocks and the “magnificent seven” – Alphabet, Amazon, Apple, Microsoft, Meta, Nvidia and Tesla – have led the charge in particular, buoyed up by investors betting on the growth of artificial intelligence.The Biden administration oversaw a strong stock market performance, helped by the economic recovery from the pandemic. However, Wall Street surged after Trump’s election victory in November, amid investor expectations for tax cuts that could increase company profits. Markets have been rattled in Trump’s first 100 days amid concerns over his erratic approach to the economy and the threat of tariffs hitting growth and stoking inflation.The US dollarThe US dollar had been rising sharply against other leading currencies, reflecting the strength of the economy and investor concerns that Trump’s policies could stoke inflation. Tariffs pushing up the price of imported goods, driving up inflation, could force the US Federal Reserve to hold back from cutting interest rates.With inflation having fallen back, the Fed cut its benchmark rate last year by a whole percentage point – from a range between 5.25% and 5% to between 4.25% and 4.5%. Higher inflation could limit its capacity for further rate cuts.A dramatically slowing economy could force the central bank to take action to lower borrowing costs. This has led to a pullback in the dollar in recent weeks.Washington has long held a “strong dollar” policy in the view that it supports the purchasing power of US consumers, helping to keep inflation low. The dollar is also used as the currency of choice for world trade and underpins the financial system. The US Treasury secretary, Scott Bessent, has said this approach is not changing. But Trump has argued that a weaker dollar would benefit US manufacturing by making exports cheaper for overseas buyers.Prices of inputs for manufactured productsBusiness surveys have shown a marked increase in input costs for US manufacturers, providing an early warning sign for growth and inflation. The price gauge on the Institute for Supply Management (ISM) manufacturing purchasing managers’ index (PMI) shows raw material costs rose sharply at the start of this year, in the first signs of supplier difficulties and discussions about who will pay for tariffs. The rise in input costs could dent US manufacturing output, and is likely to be passed on to consumers in the form of higher prices for finished goods.Consumer spendingUS consumer spending unexpectedly dropped in January for the first time in almost two years, with a fall of 0.2%, the biggest decrease in nearly four years. Cold temperatures in some parts of the country, as well as wildfires in California, were likely to have hit spending. However, some analysts warn consumer sentiment has taken a knock amid mounting concern over the strength of the economy. More

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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