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    Trump 100 days: ‘unpredictable’ US alienates allies and disrupts global trade

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    For US foreign policy, Donald Trump’s first 100 days in office were the weeks when decades happened.In just over three months, the US president has frayed alliances that stood since the second world war and alienated the US’s closest friends, cut off aid to Ukrainians on the frontlines against Vladimir Putin, emboldened US rivals around the world, brokered and then lost a crucial ceasefire in Gaza, launched strikes on the Houthis in Yemen and seesawed on key foreign policy and economic questions to the point where the US has been termed the “unpredictable ally”.The tariffs Trump has unleashed will, if effected, disrupt global trade and lead to supply chain shocks in the United States, with China’s Xi Jinping seeking to recruit US trade allies in the region.The pace of the developments in the past 100 days makes them difficult to list. Operating mainly through executive action, the Trump administration has affected nearly all facets of US foreign policy: from military might to soft power, from trade to immigration, reimagining the US’s place in the world according to an isolationist America First program.“The shake-up has been revolutionary, extraordinary. It’s upended 80-some years of American foreign policy,” said Ivo Daalder, president of the Chicago Council on Global Affairs and a former ambassador to Nato.The Trump presidency has ended the relative peace in the western hemisphere since the end of the second world war underwritten by US economic, military and diplomatic influence, Daalder said.“The foundation of the Pax Americana was trust, and once you break trust, it’s extraordinarily difficult to restore,” he said. “And restoring trust – trust in America, trust in American institutions, trust in American voters – it takes a long time to rebuild.”The US’s key foreign policy and national security making institutions are in crisis. The Pentagon is mid-meltdown under the leadership of Pete Hegseth, whose erratic and unsteady leadership has been reflected in score-settling among his senior staff, while a leaked Signal chat embroiled the national security adviser, Mike Waltz, and others in scandal. The state department under Marco Rubio is undergoing a vast shake-up, and the US’s diplomats are being sidelined in favour of envoys such as Steve Witkoff with little background in foreign policy. Critics say the gutting of USAID will cut back on US soft power for generations.“There’s no better way to get us into a war, perhaps a catastrophic war, than essentially poking out your eyes and numbing your brain, and you’re left with Donald Trump and a few people sitting in the White House winging it, and they’re not competent to wing it,” said Steven Cash, a former intelligence officer for the CIA and Department of Homeland Security, and the executive director of the Steady State, an advocacy group of former national security professionals. “And so we’ve seen that with the tariffs. We’ve seen that with Nato. We’ve seen that with Ukraine, and we’re gonna see a lot more of it.”After assuming office in 2021, Joe Biden declared: “America is back.”“The world now knows America is not back,” Daalder said. “America is gone again.”In a recent interview with the Zeit newspaper, Ursula von der Leyen, president of the European Commission, expressed similar sentiments, saying: “The west as we knew it no longer exists.”View image in fullscreenIn Munich, JD Vance delivered a landmark speech openly pandering to Europe’s far right, accusing European leaders of “running from their own voters” and saying: “America can do nothing to help you.”A backlash has begun. Last month the EU presented an €800bn ($913bn) plan on the future of European defense, a putative step in what would be a herculean task to overcome internal divisions and onshore European defense manufacturing. The UK and other US allies have considered other efforts, such as limiting intelligence-sharing with the US. “We still need America now, but there is a vision [of a time] when we won’t any more,” said one European diplomat.Meanwhile, the Trump effect is beginning to sway elections as well – though not as he might hope.In the western hemisphere, Trump has terrorised US neighbours and tacitly declared what some have compared to a new Monroe doctrine, saying the White House planned to “take back” the Panama canal and annex Greenland, while regularly calling Canada the future 51st state.In an extraordinary bit of election-day meddling, Trump wrote a social media post suggesting that he was on the ballot in Canada’s vote, repeating that Canada should become the 51st state in order to avoid tariffs and reap economic awards.Canadians responded by duly electing the liberal candidate Mark Carney, completing a 30% swing in polling that has largely been explained by opposition to Trump’s tariff war and territorial menaces.In Europe, populist parties seen as Trump’s ideological allies are also on the defensive. While Trump was popular in terms of his ideological and anti-woke agenda, the trade war has made him “quite toxic, just in the last month or two, with a lot of the populist voting bases”, said Jeremy Shapiro, the research director of the European Council on Foreign Relations and a former special adviser to the assistant secretary of state for Europe and Eurasia.Nowhere has the shift in US foreign policy been felt more acutely than in Ukraine, where the sudden cutoff in US military and intelligence sharing confirmed the Trump administration’s goals of pressuring Ukraine to accept a deal with the Kremlin, rather than the other way around. Those frustrations boiled over into an Oval Office meltdown fueled by Vice-President JD Vance that one former US official close to the talks called “disgraceful”.Trump has swung wildly on the war, on certain days targeting Volodymyr Zelenskyy as a “dictator” and then quickly pivoting to call out Putin for continuing to rain down missiles on Ukrainian cities. His theatrics have produced symbolic moments, including a sudden recognition that “maybe [Putin] doesn’t want to stop the war” after speaking with Zelenskyy this weekend in the baptistry of St Peter’s Basilica. But in terms of hard results, Trump has not fulfilled a promise to end the war within 24 hours or produced a clear path to peace many months later.View image in fullscreenThe Russians have said they largely tune out what he says in public.“We hear many things coming from President Trump,” said Sergey Lavrov, the Russian foreign minister, during a television appearance this weekend. “We concentrate, as I said, on the real negotiations which President Trump supports and instructed his people to continue to engage in these negotiations.”Key among those people is Witkoff, a neophyte diplomat who has spent hours in conversation with Putin, often with no other adviser present. One person close to the Kremlin said that Witkoff was viewed as a reliable negotiator in Moscow with “a chance to make an agreement”, but added: “There is a chance it will pass by.”Much of the burden of international diplomacy now rests on Witkoff, who is also running point on other key negotiations. Trump has tasked him with reaching a deal to prevent Iran from obtaining a nuclear weapon, in effect renegotiating the Joint Comprehensive Plan of Action that he scuttled in 2018. Both the US and Iran have played up the talks, although “differences still exist both on major issues and on the details”, the Iranian foreign minister, Abbas Araghchi, told state television this week.And then there is the Middle East, where the Trump administration scored its greatest early success by negotiating a ceasefire in Gaza but then failed to prevent its collapse, with Israel cutting off new aid to Gaza as the fighting continues.“There now seems to be less focus on ending the devastating conflict,” wrote Stefanie Hausheer Ali, a non-resident fellow at the Atlantic Council’s Rafik Hariri Center and Middle East Programs. “Trump’s threat in February to Hamas to release the hostages or ‘all hell is going to break out’ has, in practice, meant Israel restarting the war and blocking humanitarian aid from entering Gaza. Without an alternative to Hamas rule, the militant group may hang on and continue to fight as an insurgency, replenishing its ranks by recruiting desperate people.”Trump’s most extreme remarks have turned out to be bluster: he stunned the world when he claimed that he would turn the Gaza Strip into beachfront condos and said that the local Palestinian population would be forcibly removed. Months later, the initiative is largely forgotten.While attempting to close three landmark negotiations at once, the Trump administration has also launched a trade war with the entire world, establishing sweeping tariffs on all foreign imports before abruptly reversing course and cutting tariffs to 10% save for those against China.With so many major efforts ongoing, observers say that the government is largely paralysed to deal with smaller but still crucial issues in foreign policy and national security. As part of a blanket ban on refugees, tens of thousands of Afghans who assisted US troops against the Taliban are left waiting for relocation to the United States, a promise that was extended by previous administrations.“The lack of clarity and the chaos are the things that are causing so much pain,” said Shawn VanDiver, the founder and president of #AfghanEvac, a group that works with the state department to help resettle Afghans.He said he was critical of both the Biden and Trump administrations for failing to relocate the tens of thousands of Afghans who were far enough along in the vetting program to be relocated before Trump came into office.“The truth is, is that when America makes a promise, you should be able to trust our word,” he said. “If our flag waving over an embassy in Tunisia or Baghdad or Kabul, or Kyiv doesn’t mean this is the place where there’s truth, where there’s justice … well, then what are we even doing here?” More

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      Trump’s Tariff Threat for Drug imports Poses Big Political Risks

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      Levies on Americans’ daily prescriptions and other medicines could raise costs, spur rationing and lead to shortages of critical drugs.President Trump’s decision to move a step closer to imposing tariffs on imported medicines poses considerable political risk, because Americans could face higher prices and more shortages of critical drugs.The Trump administration filed a federal notice on Monday saying that it had begun an investigation into whether imports of medicines and pharmaceutical ingredients threaten America’s national security, an effort to lay the groundwork for possible tariffs on foreign-made drugs.Mr. Trump has repeatedly said he planned to impose such levies, to shift overseas production of medicines back to the United States. Experts said that tariffs were unlikely to achieve that goal: Moving manufacturing would be hugely expensive and would take years.It was not clear how long the investigation would last or when the planned tariffs might go into effect. Mr. Trump started the inquiry under a legal authority known as Section 232 that he has used for other industries like cars and lumber.Mr. Trump said in remarks to reporters on Monday that pharmaceutical tariffs would come in the “not too distant future.”“We don’t make our own drugs anymore,” Mr. Trump said. “The drug companies are in Ireland, and they’re in lots of other places, China.”We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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      in US Politics

      The Guardian view on Friedrich Merz’s grand coalition: gambling on a new centre ground | Editorial

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      Some years ago, hundreds of German finance ministry staff dressed in black and formed a giant zero to salute their boss, Wolfgang Schäuble, as he left office. It was a tribute to Mr Schäuble’s extreme fiscal conservatism, which had delivered Germany’s first balanced budget in the postwar period. Amid resurgent prosperity in the Angela Merkel years, the so-called black zero – symbolising a constitutional prohibition on public debt – had gradually acquired cult status.As a new administration prepares to take power in Berlin, it seems unlikely that human euro signs will welcome the latest politician to take on Mr Schäuble’s former role. But in dramatic fashion, the spending taps are set to be turned on. Via a swiftly staged March vote in the outgoing Bundestag, “debt brake” dogma was consigned to history by the chancellor‑elect, Friedrich Merz. The way was thus paved for groundbreaking expenditure on defence, and the overhaul of an economy being left behind in a changed, suddenly menacing world.So much for the theory – now for the practice. Mr Merz, the centre-right leader of the Christian Democratic Union (CDU), last week concluded the fastest set of coalition talks since 2009. Pending approval of the deal by Social Democratic party (SPD) members, he is expected to be sworn in as chancellor in by early May. In office, the “grand coalition” agreed between the CDU and the SPD – handed seven ministries including finance and defence – will immediately be confronted by challenges that dwarf those faced by almost all its predecessors.The US under Donald Trump, whether as economic partner or military ally, can no longer be relied upon – an era-defining shift whatever the outcome of the current tariff wars and Mr Trump’s negotiations with Moscow over Ukraine. China, once a vast outlet for the exports which fuelled growth, has morphed into a fearsome competitor, including on German soil. A stagnant economy, combined with a post-Merkel backlash against migration, has accelerated the rise of Alternative für Deutschland (AfD), one of the most extreme far‑right parties in Europe. Last week, a poll fatefully placed the AfD in the lead for the first time.The pressure from the right – both from within his own party and from the AfD – is having an impact. Mr Merz’s Trumpian promise to turn asylum seekers away at German borders from his “first day”, along with other draconian measures, will only allow the far right to up the ante still further. Meanwhile, he also appears to be looking for wriggle room on agreed coalition commitments to the less well off and to climate targets.Nevertheless, the broad economic thrust of the deal remains right for troubling times. The European Central Bank must play its part – by keeping yields on a leash. As Germany’s neighbours deal with similar geopolitical threats and uncertainties, the ability of the EU’s most powerful member state to show leadership and forge a path through the crisis will be crucial. With short-term growth acutely vulnerable to mood swings in the White House, the effects of spending will take time to be felt in people’s everyday lives. But the prospect of a transformative increase in public investment offers the hope of industrial renaissance and a restoration of voters’ trust in the political centre.Alongside his SPD counterparts last week, Mr Merz confidently announced that Germany was “back on track”. Europe badly needs him to be right.

      Do you have an opinion on the issues raised in this article? If you would like to submit a response of up to 300 words by email to be considered for publication in our letters section, please click here. More

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      in US Politics

      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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      in Elections

      As Trump Upends Global Trade, Europe Sees an Opportunity

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      President Trump has big ambitions for the global trading system and is using tariffs to try to rip it down and rebuild it. But the European Union is taking action after action to make sure the continent is at the center of whatever world comes next.As one of the globe’s biggest and most open economies, the E.U. has a lot on the line as the rules of trade undergo a once-in-a-generation upheaval. Its companies benefit from sending their cars, pharmaceuticals and machinery overseas. Its consumers benefit from American search engines and foreign fuels.Those high stakes aren’t lost on Europe.Ursula von der Leyen, the president of the European Commission, the E.U.’s executive arm, has spent the past several weeks on calls and in meetings with global leaders. She and her colleagues are wheeling and dealing to deepen existing trade agreements and strike new ones. They are discussing how they can reduce barriers between individual European countries.And they are talking tough on China, trying to make sure that it does not dump cheap metals and chemicals onto the European market as it loses access to American customers because of high Trump tariffs.It’s an explicit strategy, meant to leave the economic superpower stronger and less dependent on an increasingly fickle America. As Ms. von der Leyen and her colleagues regularly point out, the U.S. consumer market is big — but not the be-all-end-all.“The U.S. makes up 13 percent of global goods trade,” Maros Sefcovic, the E.U.’s trade commissioner, said in a recent speech. The goal “is to protect the remaining 87 percent and make sure that the global trade system prevails for the rest of us.”We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. 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. More

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      in US Politics

      The big lesson for Europe? Trump backed down under pressure | Alexander Hurst

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      My condolences to everyone who spent days trying to play 5D chess with Donald Trump’s market-exploding tariff mess. Where Trump is involved, there is a cloud of malevolent chaos, and there is grift amid the chaos. What grandmasters there are to be found are almost certainly grandmasters of grift.When markets dump $10tn in three days and then gain trillions back in a single afternoon on the erratic decisions of one deeply corrupt person, you can be sure that a small number of people have made immense sums of money out of that volatility. Were the people responsible for abnormal spikes of buying into the markets (including call options on various indexes and exchange-traded funds) on Wednesday morning – and again, 20 minutes before the tariff announcement went public – extraordinarily lucky? Were they in the right Signal group? Or were they just simply following Trump on Truth Social, where he posted: “THIS IS A GREAT TIME TO BUY!!! DJT” –just a few hours before dropping the news that he was kind of pulling back.The first takeaway for the EU – beyond the potential stock tips – is that Trump will back down under pressure. So don’t grovel: the 10% universal tariff is still there, as are last month’s tariffs on steel and aluminum, so why has the EU unilaterally stepped down its retaliatory tariffs without a corresponding step-down from the US?Trump, of course, is spinning his partial U-turn as a result of “these countries … calling me, kissing my ass”, as he bragged to a gathering of congressional Republicans on Tuesday night. I have no doubt that Trump – whom hundreds of mental health professionals have described as having such a striking and serious case of malignant narcissism that they were willing to break a professional rule and diagnose him from a distance – would have loved for that to be true. But let me go out on a limb and say that it wasn’t the ass-kissing or any “deals”. It was that investors and funds the world over were fleeing anything and everything linked to the US – including its sovereign debt.There is a longstanding phenomenon whereby Europe tends to overvalue the US’s power and underestimate its own. Europe neither “kissed ass” nor retaliated over the “liberation day” tariffs; it observed as the market carnage and threat to US Treasury bonds punched a hole in the idea of the US as impregnable. Imagine how much faster the flood away from the US and to safety elsewhere (including the euro) would have been if the EU hadimmediately used its so-called bazooka, the anti-coercion instrument – a powerful new regulation that would allow it to target US services industries such as banking and tech.The second takeaway is that the rest of the world is ready to bypass the US’s chaos and unpredictability – it just needs Europe to be the alternative. What Trump also does not understand is that the US may have a trade deficit, but it was a net exporter of trust – until it blew up an interlocking economic and security order that it had designed, built and maintained over eight decades – and of which it was the primary beneficiary. As a result, the view from Brussels now is that “there is no long-term credibility” with the US, Claus Vistesen, of Pantheon Macroeconomics, told me.Europe, on the other hand, plays by the rules. In the long run the more dents Trump pounds into the rule of law and the idea that the US is stable, rather than erratic, the stronger the euro’s argument for replacing the dollar as the world’s reserve currency. Which brings me to the third takeaway.In the face of the Trump administration’s very real animosity towards it, the EU must act as swiftly as possible to shore up its greatest weakness: its dependence on fossil-fuel imports. Sometimes, the animosity is almost laughably tragicomic, such as when US commerce secretary Howard Lutnick ranted that Europeans “hate our beef because our beef is beautiful and theirs is weak”. Other times, it’s more transparent, such as when Trump claimed there would be no negotiations unless the Europeans “pay us a lot of money on a yearly basis, number one for present, but also for past”. As in, in Trump’s mind, $350bn in annual purchases of US natural gas in exchange for lifting tariffs.Over the past few months, the refrain that governments should weaken climate regulation in order to promote growth has picked up. This would be a truly pyrrhic victory – primarily because Europe is acutely vulnerable to climate breakdown, the human and financial costs of which are staggeringly worse at every half-degree of heating, but also because the EU’s dependence on imported fossil fuels – from Russia, or from the US – is a glaring strategic and economic weakness. In fact, the grand irony of Trump’s pro-fossil fuel agenda is that he has exploded the green re-industrialisation that actually was taking place, thanks to Joe Biden’s Inflation Reduction Act, leaving the door wide open for someone else.So, to paraphrase the tech bros, if Trump is going to move fast and break things, then let’s move fast and build things.“Europe can turn this into a window of opportunity to further its edge with the US on clean tech,” says Simone Tagliapietra of the Brussels thinktank Bruegel. He advocates for a decarbonisation bank, completing the single market as urged by Mario Draghi, and issuing new eurobonds.The mantra going forward should be “whatever it takes” to fully replace fossil fuels with renewables – designed in Europe, built in Europe – so that it never spends $350bn to import gas from the US, Russia, or anywhere else.

      Alexander Hurst is a Guardian Europe correspondent More

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      in Elections

      Musk Says He Hopes Europe and U.S. Move to a ‘Zero-Tariff Situation’

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      Only three days after President Trump announced sweeping tariffs, including a 20 percent tariff on goods from the European Union, Elon Musk said on Saturday that he hoped that Europe and the United States moved “to a zero-tariff situation, effectively creating a free-trade zone.”Mr. Musk made the remarks during a videoconference appearance with Italy’s far-right League party in Florence. They came after the tech billionaire turned presidential confidant had stayed largely silent about Mr. Trump’s tariffs.During Mr. Trump’s first term, Mr. Musk had said there should be “no tariffs at all either way” between the United States and Britain.Mr. Musk also said that he hoped that the United States and Europe could “establish a very close partnership,” a statement that contrasted with the contempt members of Mr. Trump’s administration have shown for Europe, and statements by Mr. Trump himself, who claimed the European Union was created to “screw” America. He added that he wished there were “more freedom of people to move between Europe and North America.”Mr. Musk’s appearance at the League’s meeting, in which he warned of the dangers of censorship and mass immigration, came as he continued to use his influence to bolster far-right forces across Europe.Just a day earlier, Mr. Musk and Mr. Trump had voiced support for Marine Le Pen, the French far-right leader, who was convicted this week on embezzlement charges and disqualified from running for public office. Earlier this year, Mr. Musk publicized the German far-right Alternative for Germany party and weighed into Italy’s immigration debate, prompting the country’s president to rebuke him.On Saturday, he appeared at the party conference with Matteo Salvini, the leader of the League party. During his brief intervention, Mr. Musk also promoted the activities of his cost-cutting Department of Government Efficiency, supported Mr. Trump’s position on the war in Ukraine and attacked what he called the overregulation of the European Union. More

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      Global economy will ‘massively suffer’ from Donald Trump tariffs, Ursula von der Leyen warns – Europe live

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      European Commission president Ursula von der Leyen warned this morning that the global economy “will massively suffer” as a result of tariffs imposed by US president Donald Trump last night, as she said the EU was “prepared to respond.”Despite Trump’s direct attack on “pathetic” EU as he imposed 20% tariffs on the bloc, von der Leyen still expressed hopes that the relationship could “move from confrontation to negotiation,” as she warned “there seems to be no order in disorder.”But it wasn’t immediately obvious that there was any genuine prospect of that happening.Instead the EU and the individual member states are now scrambling to consider how to manage the situation.French president Emmanuel Macron has called an emergency meeting with sectors affected by Trump’s tariffs this afternoon.German economic daily Handelsblatt published new estimates this morning that the US tariffs – including 25% on car imports – could cost German carmakers BMW, Mercedes and Volkswagen as much as €11 bn given Germany is the largest EU car exporter to the US. For perspective, it’s just under a third of the total value of German automotive exports to the US at €36.8 bn.But the worry is not only about the immediate impact, but the more long term consequences of last night’s decision.Addressing Europeans directly, von der Leyen said “I know that many of you feel let down by our oldest ally,” as she stressed the need to think about what’s next.Or as Moritz Schularick, president of the Kiel Institute for the World Economy, put it to Handelsblatt:
      “There is this memorable picture of a stick that you can bend and that comes back again and again. But at some point, if you bend too much, the stick breaks.
      I believe that in terms of trust in the United States, something has broken down in recent weeks that will not come back so quickly.”
      It’s Thursday, 3 April 2025, it’s Jakub Krupa here, and this is Europe Live.Good morning. Fasten your seatbelts, it’s going to be a lively one.Rutte opens with expressing condolences about the death of four US soldiers during a Nato training in Lithuania.He then highlights the new US administration’s desire to “break the deadlock” on Ukraine with Russia, and he pointedly says that European allies step up their spending in response to demands from president Trump.Rubio thanks for his condolences and stresses that the troops’ participation in training shows that the “US is in Nato, … as active as it has ever been,” as he criticised “this hysteria and hyperbole” about the US and Nato.The United States President Trump’s made clear he supports Nato. We’re going to remain in Nato. He’s made it clear,” he says.But he adds that the US wants Nato “to be stronger, more viable” and “invest more in national security.”“[Trump] is not against Nato. He is against a Nato that does not have the capabilities that it needs to fulfil the obligations that the treaty imposes upon each and every member state,” he says.He adds that “no one expects that you’re going to be able to do this in one year or two, but the pathway has to be real.”No questions after their statements, so that’s it.Meanwhile in Brussels, US state secretary Marco Rubio is taking part in today’s Nato ministerial meeting.He is appearing at a press conference together the alliance’s secretary general Mark Rutte now.You can follow it below and I will bring you the key lines here.Italian prime minister Giorgia Meloni has cancelled all her appointments on Thursday as she wants to focus on the response to Trump’s tariffs, her office said.La Repubblica reported that she had been expected to attend events in Calabria, but decided to stay in Rome instead.Earlier today, I brought you her initial response to Trump’s announcement from last night, as she opposed the decision and vowed to “do everything we can to work towards an agreement with the United States, with the aim of avoiding a trade war that would inevitably weaken the West in favor of other global players.”Meloni was the only sitting European leader to attend Trump’s inauguration in January.Elsewhere, Israeli prime minister Benjamin Netanyahu is in Hungary today to meet with the country’s prime minister Viktor Orbán, and that’s despite, as AP notes, a warrant for his arrest issued by the world’s top war crimes court.Instead, Netanyahu was welcomed with military honours at the beginning of his four-day trip, and the two leaders will speak together at a press conference in Budapest later this morning.The international criminal court in The Hague, the Netherlands, issued a warrant for Netanyahu’s arrest last year over his government’s actions in the Gaza Strip. Hungary criticised it at the time as “outrageously impudent” and “cynical.”A senior aide to Orbán said today that Hungary would now move to withdraw from the court, “in accordance with the constitutional and international legal framework.”While that’s a more radical move, a number of other countries previously indicated they would allow Netanyahu to visit without arresting him, including Germany and Poland, while France claimed he had “immunity” from the court’s order.I will keep an eye on this story for you and bring you the latest.The tariff issue has put Spain’s far-right Vox party – devoted fans of Trump and his radical agenda – in something of a bind.But, reacting to news of the 20% tariffs on EU products, the party’s leader, Santiago Abascal, has chosen to blame … the EU and his political opponents in Spain.His recent post on X has more than a whiff of diversionary tactics to it. In it, he accuses Ursula von der Leyen, the president of the European Commission, Spain’s Socialist prime minister, Pedro Sánchez, and Alberto Núñez Feijóo, leader of the conservative People’s party (PP) of failing to defend the interests of the Spanish people.“The People’s party and the Socialists are dragging us into a suicidal trade war,” he wrote.“Our economy competes on unequal terms because of the ideological bureaucracy of the two-party system. And the only solution they offer is further submission to China, continued wars, and censorship of anyone who speaks out. We must expel this corrupt caste that has only brought ruin and loss of freedoms. And we will do it.”The Spanish Wine Federation (FEV) has described Trump’s imposition of a 20% tariff on EU products as a “significant blow to Spanish wineries”, for whom the US is the second largest export destination, and the No 1 export destination when it comes to sparkling wines.“The tariffs announced by the US are completely unjustified in the specific case of wine, considering that the current tariff gap between the tariffs applied by the EU and the US is minimal,” the FEV’s director general, José Luis Benítez, said on Thursday.Benítez warned that the measure would harm not only Spanish wine-makers but also US consumers, “who consume more wine than they produce”.He also pointed out that the newly announced tariffs would be particularly damaging to small and medium-sized producers, which make up 99% of Spain’s wineries, as they have less capacity to diversify their exports and are more dependent on the main export markets.The US market represents approximately 13% of Spain’s total foreign sales. In 2024, 97m litres of wine were exported for a value of around €390m.German chancellor Olaf Scholz said Trump’s decision was “fundamentally wrong” and undermined the free trade globally, as he warned that all countries “will suffer from these ill-considered decisions.”He said it amounted to “an attack on a trade system that has created prosperity all round the world, itself an American achievement.”Using similar language, German economy minister Robert Habeck said these were “the most disruptive tariff increases in 90 years,” as he warned of potentially “dramatic” effects of the US president’s decisions.Speaking at a press conference in Berlin, Habeck said it was “economically wrong” to say that the existing trading arrangements were “of detriment to the US,” as he called to reject this logic and urged nations in favour of free trade to form a united front in response.Habeck warned that the consequences of these decisions will affect the next federal government and have ramifications “far beyond Germany and beyond Europe.”]The minister also spoke about countermeasures being prepared in response. He said he was not in a position to show them or announce details yet – although he briefly waves the documents at reporters – but he insisted that “good work has been done there” to prepare for this moment.He added that he hoped Trump would buckle under pressure, but “the logical consequence is that he has to feel the pressure” from Germany, Europe and other like-minded countries.Greek finance minister Kyriakos Pierrakakis said that the fresh tariffs imposed by the US government on world trade were a historic shift towards protectionism and a deviation from how the European Union sees economic and social progress, Reuters reported.“As a country, we are in favour of free trade,” Pierrakakis said in a statement. “We hope that this chapter will last as little as possible.”French prime minister François Bayrou told reporters that Donald Trump’s tariffs marked “a catastrophe” for the global economy, and posed “an immense difficulty” for Europe.Speaking on the margins of a meeting in the French Senate, he also said the move will be “a catastrophe for the US and for US citizens.”In comments reported by BFMTV and Le Figaro, Bayrou criticised the US for turning on its allies, as he warned about “serious times” facing Europe and the West.The EU will respond in a “legitimate, proportionate and decisive way” to Donald Trump’s trade tariffs, but its strongest weapon is still “a last resort”, the head of the European parliament’s international trade committee has said.Bernd Lange, a German Social Democrat, said the EU was discussing the use of the anti-coercion instrument, which EU insiders almost inevitably describe as “the big bazooka”.The anti-coercion legislation, which entered into force in 2023, gives the EU wide leeway to impose commerce and investment sanctions against a foreign government deemed to be using trade in an attempt to browbeat countries into changing unrelated policies. The law allows the EU to use ten different kinds of retaliation against a coercive government, notably targeting services. Possible measures could include taxing tech companies, revoking banking licenses and intellectual property rights, blocking companies from public procurementIt was agreed not long after China had imposed trade restrictions on Lithuania over the Baltic state’s friendly policy towards Taiwan.Lange, who helped negotiate the law, said the EU was discussing use of this instrument – “this is of course the bazooka, the strongest measure we could take” – but it would only be used as a last resort.“This is not our first step. Using the ACI, this would really be hard escalation and therefore a last resort, but we have it.”Having renamed Trump’s so-called “liberation day”, as “inflation day”, the MEP said that the EU could target US tech giants in retaliation for tariffs, which is possible even without the anti-coercion law. “Of course if we are really on an escalation ladder, then of course we will have a look to the tech giants as well – I would say this is not the first choice.”The MEP, who travels to Washington next week, still hopes the EU can negotiate its way out of tariffs, but is not optimistic. He described the structure of the US government as “totally unclear” and that only the president and his trade adviser, Peter Navarro, controlled trade, rather than senior officials, such as the US Trade Representative, adding: “That is really a mess.”The EU has some options when considering its response to overnight announcements, including retaliating with tariffs on US goods and services and forming closer ties with other countries.The bloc has already rejected one possible option: fold your cards. But vowing retaliation is only the start.The questions are about what response the EU will have, how quickly it can be marshalled and whether divisions between member states will undermine the tough talk.The EU response will depend on how tightly its 27 member states line up behind a common strategy in a trade war that could trigger economic turmoil and job losses in Europe. An early indication should come on Monday when EU trade ministers meet to discuss the retaliation planned for this month and other measures.Nerves are building. France is worried about the fallout on its wines and spirits industry; Dublin fears an exodus of US multinationals headquartered in Ireland; and the Italian prime minister, Giorgia Meloni, has said the bloc should not act on impulse while the national industry group Confindustria has called for negotiations with the White House.Forging a common line will be critical to new forms of trade retaliation: for example, only a weighted majority of EU countries can decide whether the bloc is facing coercion from the US. That would be an outcome almost no one imagined a decade ago.The German Federation of Business, BDI, has denounced Trump’s tariffs as an “unprecedented attack” on global trade.In a statement issued this morning, it warned that “the European economy must not become a plaything of geopolitical interests” and called for a united response to the 20% tax the 27 countries now face.
      “The announced tariffs are an unprecedented attack on the international trading system, free trade, and global supply chains. The rationale for this protectionist escalation is incomprehensible. It threatens our export-oriented companies and jeopardizes prosperity, stability, jobs, innovation, and investment worldwide.
      The European Union can only act as a united front. This applies to the 27 member states as well as across sectors. The EU has its own instruments for an effective counter-reaction, which it can use decisively. We support the Commission’s strategy of remaining willing to negotiate, aware of Europe’s strengths, and responding flexibly to potential offers.
      German industry has always relied on fair competition, open markets, and cooperative relations with the United States. The EU must now strengthen its alliances with other major trading partners and should coordinate its response with them. A coordinated response is also necessary to counter diversion effects in international trade.”
      Elsewhere, Danish prime minister Mette Frederiksen continues her three-day trip to Greenland amid escalating tensions with the US over the future status of the island.Arriving yesterday, she said “it is clear that with the pressure put on Greenland by the Americans, in terms of sovereignty, borders and the future, we need to stay united.”“I have but one wish and that is to do all that I can to take care of this marvellous country and to support it at a difficult time,” Frederiksen said.She had a dinner with the new Greenlandic prime minister, Jens-Frederik Nielsen, last night, and today gets on with a full programme of meetings likely to touch on the future shape of Danish-Greenlandic relations and economic cooperation.Frederiksen also met with the outgoing prime minister Múte B. Egede who will remain a prominent figure in the new government formed after last month’s snap elections in Greenland.The talks will be a first test for Nielsen’s new administration on whether it can formulate new demands to Copenhagen and get things done in the face of US interest in the island.Frederiksen’s visit comes just days after a highly controversial trip by US vice-president JD Vance, who came over to the US Pituffik Space Base only to directly criticise Denmark for “not doing a good job at keeping Greenland safe,” and accusing it of “underinvesting in the people of Greenland and … in the security architecture” of the island.Earlier this week, Washington Post reported that the Trump administration was studying the potential costs involved should the US succeed in its plans of taking control over Greenland, including whether it could put together a more attractive financial package to compete with Denmark.The paper said that officials were also looking at what revenue to the US Treasury could be gained from the island’s natural resources.I will keep an eye on what comes out of Frederiksen’s meetings.European stock markets are now open and they’re reacting exactly as you would expect them to.The pan-European Stoxx 600 index has fallen 1.5% at the start of trading, to its lowest level in over two months.Germany’s DAX fell almost 2.5% at the start of tading in Frankfurt, while in Paris the CAC 40 is down 2.2% and Spain’s IBEX lost 1.5%.You can follow all the latest business reaction here:Norwegian prime minister Jonas Gahr Støre expressed alarm over “bad news” on US tariffs warning they were “very serious,” with Norway hit by a 15% levy on its goods imported to the US.But Støre told public broadcaster NRK that “there is an opening for negotiations here, the Americans say, and we will use that in every possible way that we can,” Reuters reported.Støre also said he would travel to Brussels on Monday to meet with senior EU officials, including European Commission president Ursula von der Leyen to discuss further steps.UK prime minister Keir Starmer told business chiefs that “clearly there will be an economic impact” from Donald Trump’s tariffs, as he insisted the government would react with “cool and calm heads,” PA news agency reported.He said “nothing is off the table” when it comes to the UK response.Starmer said the government will now focus on making decisions “guided only by our national interest” and on “putting money in the pockets of working people,” as he stressed “one of the great strengths of this nation is our ability to keep a cool head.”Here are some further quotes from Starmer, via PA:
      “Today marks a new stage in our preparation. We have a range of levers at our disposal and we will continue our work with businesses across the country to discuss their assessment of the options.”
      “Our intention remains to secure a deal, but nothing is off the table.”
      “We must rise to this challenge and that is why I’ve instructed my team to move further and faster on the changes I believe will make our economy stronger and more resilient.”
      “Because this Government will do everything necessary to defend the UK’s national interest, everything necessary to provide the foundation of security that working people need to get on with their lives.”
      “That is how we have acted and how we will continue to act: with pragmatism, cool and calm heads, focused on our national security.”
      Our political editor, Pippa Crerar, noted that Downing Street, which had been expecting a 20% rate to be imposed on the UK, expressed relief to have escaped the higher rate with lower, 10% tariffs.Keir Starmer’s more conciliatory approach to the Trump administration appeared to have paid off, she said.European Commission president Ursula von der Leyen warned of “dire consequences” for millions of people, as she said tariffs would “hurt consumers around the world.”She said there was “no clear path through the complexity and chaos that is being created as all US trading partners are hit,” but she insisted the EU’s unity “is our strength” and the bloc would be prepared to respond with calibrated countermeasures.Outgoing German economy minister Robert Habeck stressed the need for a united EU response, saying the bloc should leverage the fact it has the largest single market in the world.“Europe’s strength is our strength,” he said, adding he hoped for “a negotiated solution.”Italian prime minister Giorgia Meloni called the introduction of US tariffs “wrong” as she vowed to “do everything we can to work towards an agreement with the United States, with the aim of avoiding a trade war that would inevitably weaken the West in favor of other global players.”“In any case, as always, we will act in the interest of Italy and its economy, also by discussing with other European partners,” she added.Swedish prime minister Ulf Kristersson said he “deeply regreted” the US decision, saying “we don’t want growing trade barriers” as he lauded the benefits of free trade.But he said the government was ready to respond and work with the EU to “take every opportunity to reverse these developments.”“We want to find our way back to the path of trade and cooperation together with the US,” he stressed.Irish prime minister Micheál Martin said that tariffs “benefit no one,” as he warned they are “bad for the world economy, they hurt people [and] businesses.”“My priority, and that of the government, is to protect Irish jobs and the Irish economy, and we will work with our companies … to navigate the period ahead,” he said.He said he would work with EU partners to “get on a negotiation with the US to limit the damage.”Martin also highlighted “the added value and the strength that Ireland has given to so many US companies” based there.Polish prime minister Donald Tusk posted a brief update on social media, saying: “Friendship means partnership. Partnership means really and truly reciprocal tariffs. Adequate decisions are needed.”Finnish prime minister Petteri Orpo said the tariff decisions were “concerning,” as he warned “there are no winners in a trade war.”“Businesses, consumers, and economic growth suffer. The EU is ready to respond and negotiate. We support this effort. Finland is prepared as part of the Union,” he said.European Commission president Ursula von der Leyen warned this morning that the global economy “will massively suffer” as a result of tariffs imposed by US president Donald Trump last night, as she said the EU was “prepared to respond.”Despite Trump’s direct attack on “pathetic” EU as he imposed 20% tariffs on the bloc, von der Leyen still expressed hopes that the relationship could “move from confrontation to negotiation,” as she warned “there seems to be no order in disorder.”But it wasn’t immediately obvious that there was any genuine prospect of that happening.Instead the EU and the individual member states are now scrambling to consider how to manage the situation.French president Emmanuel Macron has called an emergency meeting with sectors affected by Trump’s tariffs this afternoon.German economic daily Handelsblatt published new estimates this morning that the US tariffs – including 25% on car imports – could cost German carmakers BMW, Mercedes and Volkswagen as much as €11 bn given Germany is the largest EU car exporter to the US. For perspective, it’s just under a third of the total value of German automotive exports to the US at €36.8 bn.But the worry is not only about the immediate impact, but the more long term consequences of last night’s decision.Addressing Europeans directly, von der Leyen said “I know that many of you feel let down by our oldest ally,” as she stressed the need to think about what’s next.Or as Moritz Schularick, president of the Kiel Institute for the World Economy, put it to Handelsblatt:
      “There is this memorable picture of a stick that you can bend and that comes back again and again. But at some point, if you bend too much, the stick breaks.
      I believe that in terms of trust in the United States, something has broken down in recent weeks that will not come back so quickly.”
      It’s Thursday, 3 April 2025, it’s Jakub Krupa here, and this is Europe Live.Good morning. Fasten your seatbelts, it’s going to be a lively one. More