Protectionism (Trade)

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      Trump’s Tariffs Hit Stock Markets

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      Global leaders are retaliating and investors have sold off stocks in Asia and Europe.Nowhere to hide as a new wave of U.S. tariffs sinks global stock markets.Franck Robichon/EPA, via ShutterstockNot just tough talk President Trump wasn’t bluffing, after all.Global markets plunged on Tuesday after U.S. tariffs went into effect on roughly $1.5 trillion worth of imports from Canada, Mexico and China, with another, and even broader, wave set to kick in as soon as next week.China and Canada have already responded, with Beijing targeting the American heartland with sweeping levies on imported food and halting log and soybean shipments from select U.S. companies. Mexico is expected to retaliate, too.The escalation has global business leaders increasingly worried about what will come next, as economists warn that consumers and companies will soon see higher prices. Warren Buffett offered a reminder of what the global economy is facing. “Tariffs,” the billionaire investor said this week, “are an act of war, to some degree.”Here’s the latest:Stocks in much of Asia and Europe fell on Tuesday, after the S&P 500 yesterday suffered its worst one-day decline this year. U.S. stock futures were down slightly on Tuesday.Hit especially hard on Tuesday were the shares of European automakers, including Volkswagen, BMW, and Daimler Truck. Levies could slam the sector, which is highly dependent on a complex cross-border supply chain.The CBOE volatility index, Wall Street’s so-called fear gauge popularly known as the VIX, jumped, posting its biggest one-day spike this year, according to Deutsche Bank.The sell-off also extended to cryptocurrencies (more on that below), and, in a new twist, the dollar.If global investors weren’t spooked before, they seem to be now. “The market finally took the Trump administration at its word, and the realization that the tariff talk wasn’t just a negotiating tactic is starting to sink in,” Chris Zaccarelli, an investment strategist for Northlight Asset Management, said in a research note yesterday evening.How long will the trade battle last? Analysts see reason for cautious optimism — at least on China. “We view Beijing’s responses as still strategic and restrained,” Xiangrong Yu, Citigroup’s chief China economist, said in a research note on Tuesday. He said a trade deal was still “plausible.”The Shanghai composite index closed slightly higher on Tuesday.Market watchers warn of deep repercussions should the trade war drag on. Trump seems to be digging in, telling reporters yesterday that there is “no room left for Mexico or for Canada.” A protracted fight could dent global growth and accelerate inflation, all of which could “hamstring the Fed,” Mark Haefele, the chief investment officer at UBS Global Wealth Management, told Bloomberg Television on Tuesday.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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      Trump Picks Another Trade Fight With Canada Over Lumber

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      The president initiated an investigation that could lead to tariffs on lumber imports, nearly half of which comes from Canada.President Trump on Saturday initiated an investigation into whether imports of lumber threaten America’s national security, a step that is likely to further inflame relations with Canada, the largest exporter of wood to the United States.The president directed his commerce secretary, Howard Lutnick, to carry out the investigation. The results of the inquiry could allow the president to apply tariffs to lumber imports. A White House official declined to say how long the inquiry would take.An executive memorandum signed by Mr. Trump ordered the investigation and was accompanied by another document that White House officials said would expand the volume of lumber offered for sale each year, increasing supply and helping to ensure that timber prices do not rise.The trade inquiry is likely to further anger Canada. Some of its citizens have called for boycotts of American products over Mr. Trump’s plans to impose tariffs on all Canadian imports beginning on Tuesday. The president, who also plans to hit Mexico with similar tariffs, says the levies are punishment for failure to stem the flow of drugs and migrants into the United States.Many Canadians have contested Mr. Trump’s assertion that fentanyl is flowing from its country into the United States.Canada and the United States have sparred over protections in the lumber industry for decades. The countries have protected their own industries with tariffs and other trade measures, and argued about the legitimacy of those measures in disputes both under the North American Free Trade Agreement and at the World Trade Organization.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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      The Dark Heart of Trump’s Foreign Policy

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      The journalist Fareed Zakaria discusses the worldview emerging from Trump’s foreign policy decisions regarding Ukraine, Gaza, China and beyond.The New York TimesThe Dark Heart of Trump’s Foreign PolicyThe journalist Fareed Zakaria discusses the worldview emerging from Trump’s foreign policy decisions regarding Ukraine, Gaza, China and beyond.This is an edited transcript of an episode of “The Ezra Klein Show.” You can listen to the conversation by following or subscribing to the show on the NYT Audio App, Apple, Spotify, Amazon Music, YouTube, iHeartRadio or wherever you get your podcasts.What is the Donald Trump doctrine? What is Donald Trump’s foreign policy?I think the place to begin to try to untangle what we’ve actually seen is to listen to the way Trump and Vice President JD Vance speak about our allies.Archived clip of Donald Trump: I’ve had very good talks with Putin, and I’ve had not such good talks with Ukraine. They don’t have any cards, but they play it tough.Archived clip of JD Vance: The threat that I worry the most about vis-à-vis Europe is not Russia, it’s not China, it’s not any other external actor. What I worry about is the threat from within. The retreat of Europe from some of its most fundamental values — values shared with the United States of America.Archived clip of Donald Trump: I mean, look, let’s be honest: The European Union was formed in order to screw the United States. That’s the purpose of it. And they’ve done a good job of it, but now I’m president.Something is new here. The Trump doctrine that we’ve seen in the first month of this presidency is going to reshape the world much more fundamentally than Trump did in the four years of his first term. That’s in part because of who is around him now — JD Vance and Elon Musk, instead of the foreign policy establishment.So I wanted to have a bigger picture conversation about what this Trump doctrine is. I’m joined today by Fareed Zakaria, the host of “Fareed Zakaria GPS” on CNN, a Washington Post columnist and the author of the best-selling book, “Age of Revolutions.”This episode contains strong language.Ezra Klein: Fareed Zakaria, welcome back to the show.Fareed Zakaria: Always a pleasure, Ezra.To the extent you feel you can define it, what’s the Trump doctrine?Part of the problem with Trump is that he is so mercurial. He’s so idiosyncratic that, just when you think you figured out the Trump doctrine, he goes and says something that kind of sounds like the opposite of the Trump doctrine.But I do think that there is one coherent worldview that Trump seems to espouse and has espoused for a long time. The first ad he took out when he was a real estate developer was in 1987. It was an ad about how Japan was ripping us off economically and Europe was ripping us off by free-riding on security. And what that represents, fundamentally, is a rejection of the open international system that the United States and Europe have built over the last eight decades.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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      Oil Companies Wanted Trump to Lower Costs. Tariffs Are Raising Them.

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      President Trump’s promise during last year’s election to make it far easier to drill for oil and gas thrilled energy executives who believed his policies would lower their costs and help them make a lot more money.Those hopes are now fading. Thanks to Mr. Trump’s tariffs, the oil and gas industry is contending with rising prices for essential materials like steel pipes used to line new wells.That has not yet translated into a meaningful change in U.S. drilling activity or production expectations, but companies have begun revising budgets to reflect higher materials costs. Decisions made today about which wells to drill will affect production many months from now.Oil refineries are separately bracing for a tariff on Canadian oil, which some of them need to produce gasoline, diesel and other fuels.At the same time, consumers have grown jittery about the economy and the price of oil has fallen about 10 percent since just before Mr. Trump took office, to around $70 a barrel. Oil companies tend to drill less when prices fall.The combination could complicate Mr. Trump’s stated desire to juice U.S. oil and natural gas production, which are already at or near record highs.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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      Inflation Is Rising. What Will That Mean for Trump’s Tariffs?

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      Consumer sentiment has turned south as high prices weigh on households. Could that crimp big pieces of the president’s economic agenda, including tariffs?Stubbornly high inflation is beginning to weigh on households, with sentiment souring fast, economists note.Brandon Bell/Getty ImagesRising prices hit a trade war President Trump isn’t backing off his tariff threats, despite the potential risk to the U.S. economy and financial markets.That puts additional focus on the latest Personal Consumption Expenditures report, the Fed’s favored inflation measure. It’s due for release at 8:30 a.m. Eastern.The question is whether lingering inflation also will have big implications for the Trump agenda, with some economists predicting that tariffs will raise inflation and lower growth, even if the target countries don’t retaliate. Friday’s report is expected to show only slight relief for consumers.Economists worry about a hot P.C.E. reading, which could push the central bank to keep borrowing costs higher well into the second half of the year, even as consumer confidence and the mood in the C-suites increasingly turn south and the economy shows signs of slowing.A recession is seen as unlikely, but there are other concerns. Recent data shows a growing affordability crunch with egg prices spiking (more on that below), home sales plummeting and jobless claims climbing. Watch next week’s jobs report for more, including which parts of the country could be hardest hit by Elon Musk-led cuts to the federal government. (Alaska is among them.)“With 3 million federal employees potentially worrying about their jobs and 6 million federal contractors worrying about their jobs, the risks are rising that households may begin to hold back purchases of cars, computers, washers, dryers, vacation travel plans, etc.,” Torsten Slok, Apollo’s chief economist, wrote in a research note on Thursday. Sentiment, he added, is “bad.”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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      Can the Federal Reserve Look Past Trump’s Tariffs?

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      Top officials are grappling with how to handle potential price increases caused by the administration’s policies.As President Trump’s efforts to restructure the global trade system with expansive tariffs begin to take shape, one question continues to dog officials at the Federal Reserve: How will these policies impact the central bank’s plans to lower interest rates?One influential Fed governor made clear on Monday that he did not expect Mr. Trump’s policies to derail the Fed’s efforts to get inflation under control, suggesting instead that fresh interest rate cuts are still in play this year.“My baseline view is that any imposition of tariffs will only modestly increase prices and in a nonpersistent manner,” Christopher J. Waller, the official, said in remarks at an event in Australia Monday evening. “So I favor looking through these effects when setting monetary policy to the best of our ability.”Economists are concerned that tariffs, which are essentially taxes on American consumers, will increase prices in the United States, at least temporarily, and over time slow economic growth.Mr. Waller acknowledged that the economic impact of the tariffs could be larger than anticipated depending on how they are structured and later put in place. But he suggested that any uptick in prices from tariffs could be blunted by other policies, which could have “positive supply effects and put downward pressure on inflation.”Mr. Waller’s views matter given that he is one of the seven officials who make up the Board of Governors and votes at every policy meeting.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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      Which Interest Rate Should You Care About?

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      The Fed’s short-term rates matter, but the main action now is in the 10-year Treasury market, which influences mortgages, credit cards and much more, our columnist says.Watch out for interest rates.Not the short-term rates controlled by the Federal Reserve. Barring an unforeseen financial crisis, they’re not going anywhere, especially not after the jump in inflation reported by the government on Wednesday.Instead, pay attention to the 10-year Treasury yield, which has been bouncing around since the election from about 4.8 to 4.2 percent. That’s not an unreasonable level over the last century or so.But it’s much higher than the 2.9 percent average of the last 20 years, according to FactSet data. At its upper range, that 10-year yield may be high enough to dampen the enthusiasm of many entrepreneurs and stock investors and to restrain the stock market and the economy.That’s a problem for the Trump administration. So the new Treasury secretary, Scott Bessent, has stated outright what is becoming an increasingly evident reality. “The president wants lower rates,” Mr. Bessent said in an interview with Fox Business. “He and I are focused on the 10-year Treasury.”Treasuries are the safe and steady core of many investment portfolios. They influence mortgages, credit cards, corporate debt and the exchange rate for the dollar. They are also the standard by which commercial, municipal and sovereign bonds around the world are priced.What’s moving those Treasury rates now is bond traders’ assessments of the economy — including the Trump administration’s on-again, off-again policies on tariffs, as well as its actions on immigration, taxes, spending and much more.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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      Trump and Modi Shove Disputes Into Background in White House Visit

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      Hours after President Trump paved the way for upending the United States’ trade relationship with India with broad “reciprocal” tariffs, he and Prime Minister Narendra Modi presented a united front during a news conference on Thursday at the White House.Mr. Modi became the latest head of state to seek to placate an increasingly power-flexing Mr. Trump by trying to accommodate his demands — even as Mr. Trump’s promised tariffs hung over the White House meeting. Mr. Modi heaped praise on Mr. Trump, using his motto “Make America Great Again” in English, despite mostly speaking through a translator, and applying the motto to India. “Make India Great Again,” Mr. Modi crowed.The warm greetings also extended to Elon Musk, the constant Trump companion barreling through the federal government as the head of an initiative to reshape and cut down the federal government: The two had a meeting and photo op. Mr. Musk, the wealthiest man in the world, owns a number of companies, including Starlink, a high-speed internet service, that have sought to make an entry in India.All the flattery concealed a number of tensions between the two nations, including on two of Mr. Trump’s signature issues, trade and immigration. Mr. Trump hinted at the biggest thorn when he said at the news conference that the United States had a nearly $100 billion trade deficit with India, though he inflated the number — in 2024, the figure was nearly $50 billion.Just hours earlier, Mr. Trump had directed his advisers to devise new tariff levels for countries around the world that take into account a range of trade barriers and other economic approaches adopted by America’s trading partners. India is among the nations that could face particularly significant consequences from the tariffs.At the news conference, Mr. Trump said that he had toyed with that idea during his first term, and noted that he could not get India to lower tariffs against the United States then. Now, “we’re just going to say, ‘whatever you charge, we charge,’” Mr. Trump said.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