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      UK officials land in Washington as talks over trade agreement continue

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      A team of senior British trade negotiators has landed in Washington as talks over a deal between the two countries gather pace.Officials from the business and trade department are in the US for much of this week, attempting to get an agreement signed before the planned UK-EU summit on 19 May.Downing Street did not deny reports the deal could be signed as early as this week, although government sources said the recent announcement by the US president, Donald Trump, of film industry tariffs had proved a significant setback.One person briefed on the talks said: “We have a senior team on the ground now, and it may be that they are able to agree something this week. But the reality is the Trump administration keeps shifting the goalposts, as you saw with this week’s announcement on film tariffs.”Another said Trump’s threat of 100% tariffs on films “produced in foreign lands”, which could have a major impact on Britain’s film industry, had “gone down very badly in Downing Street”.UK officials say they are targeting tariff relief on a narrow range of sectors in order to get a deal agreed before they begin formal negotiations with the EU over a separate European agreement. A draft deal handed to the US a week ago would have reduced tariffs on British exports of steel, aluminium and cars, in return for a lower rate of the digital services tax, which is paid by a handful of large US technology companies.The Guardian revealed last week the Trump administration had made negotiating a trade deal with the UK a lower-order priority, behind a series of Asian countries. UK officials said they have been able to continue talks with their US counterparts despite that, describing the Trump administration’s approach as “chaotic”.Officials from the trade department arrived in Washington this week hoping to reach an agreement on two outstanding issues, pharmaceuticals and films.Trump has said he will impose tariffs on both industries, mainstays of the British economy, but has not yet given details.This week, the US president said the US film industry was dying a “very fast death” because of the incentives other countries were offering to draw American film-makers, and promised to impose a 100% tariff on foreign-made films. Britain offers producers generous reliefs on corporation tax to locate their projects there, which help support an industry now worth about £2bn, with major US films such as Barbie having recently been shot in Britain.Trump also said that he planned to unveil tariffs on imports of pharmaceutical products “in the next two weeks”. The UK exported £6.5bn worth of such goods to the US last year.Keir Starmer, the prime minister, has ruled out reducing food production standards to enable more trade of US agricultural products, as officials prioritise signing a separate agreement with the EU, which is likely to align British standards with European ones.Officials are racing to sign the US agreement before the planned UK-EU summit, at which both sides will set out their formal negotiating positions. Leaked documents revealed on Wednesday the two remain far apart on their demands for a youth mobility scheme, with Britain demanding that visas issued under the scheme should be limited in number and duration, and should exclude dependents.EU ambassadors met in Brussels on Wednesday to discuss the progress of the deal. One diplomat said: “Negotiations are going well, the mood is still good but it is a bit early to see bold moves from one side or another.”This week Starmer also signed an agreement with India after giving way on a demand from Delhi for workers transferring to the UK within their companies to avoid paying national insurance while in the country.The concession has caused some unease in the Home Office, with Yvette Cooper, the home secretary, not having been told about it in advance.It was also criticised by Kemi Badenoch, who accused the prime minister of bringing in a “two-tier” tax system. The Tory leader denied reports, however, that she had agreed to the same concession when she was business secretary.The prime minister defended the deal on Wednesday, telling MPs at PMQs it was a “huge win” for the UK. Other senior Tories have also praised the deal, including Steve Baker, Oliver Dowden and Jacob Rees-Mogg, the latter of whom said it was “exactly what Brexit promised”.British officials say they have been surprised at the willingness of the Labour government to sign agreements which have been on the table for years but previously rejected by the Conservative government.With economists having recently downgraded the UK’s growth outlook, Starmer is understood to have decided to sign deals such as that with India, even though they do not include a number of British demands, such as increased access for services.One source said the approach was to clinch a less ambitious agreement and use that to build a fuller economic partnership in the coming years. More

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      Why Donald Trump’s plan to weaken the dollar is flawed | Kenneth Rogoff

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      Now that US President Donald Trump’s tariff war is in full swing, investors around the world are asking: what’s next on his agenda for upending the global economic order? Many are turning their attention to the “Mar-a-Lago Accord” – a plan proposed by Stephen Miran, chair of Trump’s Council of Economic Advisers, to coordinate with America’s trading partners to weaken the dollar.At the heart of the plan is the notion that the dollar’s status as the world’s reserve currency is not a privilege but a costly burden that has played a major role in the deindustrialisation of the American economy. The global demand for dollars, the argument goes, drives up its value, making US-made goods more expensive than imports. That, in turn, leads to persistent trade deficits and incentivises US manufacturers to move production overseas, taking jobs with them.Is there any truth to this narrative? The answer is yes and no. It’s certainly plausible that foreign investors eager to hold US stocks, bonds, and real estate could generate a steady flow of capital into the United States, fuelling domestic consumption and boosting demand for tradable goods such as cars and non-tradables such as real estate and restaurants. Higher demand for non-tradable goods, in particular, tends to push up the dollar’s value, making imports more attractive to American consumers, just as Miran suggests.But this logic also overlooks crucial details. While the dollar’s reserve-currency status drives up demand for Treasuries (Treasury bills, Treasury bonds, and Treasury notes), it does not necessarily increase demand for all US assets. Asian central banks, for example, hold trillions of dollars in Treasury bills, to help stabilise their exchange rates and maintain a financial buffer in the event of a crisis. They generally avoid other types of US assets, such as equities and real estate, since these do not serve the same policy objectives.This means that if foreign countries simply need to accumulate Treasury bills, they don’t have to run trade surpluses to obtain them. The necessary funds can also be raised by selling existing foreign assets such as stocks, real estate, and factories.That is precisely what happened in the 1960s through the mid-1970s. By then, the dollar had firmly established itself as the global reserve currency, yet the US was almost always running a current account surplus – not a deficit. Foreign investors were accumulating US Treasuries, while American firms expanded abroad by acquiring foreign production facilities, either through direct purchases or “greenfield” investments, in which they built factories from the ground up.The postwar era was hardly the only time when the country issuing the world’s reserve currency ran a current account surplus. The British pound was the undisputed global reserve currency from the end of the Napoleonic wars in the early 1800s until the outbreak of the first world war in 1914. Throughout that period, the UK generally ran external surpluses, bolstered by high returns on investments across its colonial empire.There is another way to interpret the US current account deficit that helps explain why the relationship between the exchange rate and trade imbalances is more complicated than Miran’s theory suggests. In accounting terms, a country’s current account surplus equals the difference between national savings and investment by the government and the private sector. Importantly, “investment” here refers to physical assets such as factories, housing, infrastructure, and equipment – not financial instruments.When viewed through this lens, it is clear that the current account deficit is influenced not just by the exchange rate but by anything that affects the balance between national saving and investment. In 2024, the US fiscal deficit was 6.4% of GDP, significantly larger than the current account deficit, which was under 4% of GDP.While closing the fiscal deficit would not automatically eliminate the current account deficit – that would depend on how the gap is closed and how the private sector responds – it is a far more straightforward fix than launching a trade war. Reducing the fiscal deficit would, however, involve the difficult political task of convincing Congress to pass more responsible tax and spending bills. And unlike a high-profile trade confrontation, it wouldn’t cause foreign leaders to curry favour with Trump; instead, it would shift media attention back to domestic politics and congressional negotiations.Another key factor behind the current account deficit is the strength of the American economy, which has been by far the most dynamic among the world’s major players in recent years. This has made US businesses particularly attractive to investors. Even manufacturing has grown as a share of GDP. The reason employment has not kept pace is that modern factories are highly automated.skip past newsletter promotionafter newsletter promotionMiran’s plan, clever as it might be, is based on a flawed diagnosis. While the dollar’s role as the world’s leading reserve currency plays a part, it is just one of many factors contributing to America’s persistent trade deficits. And if the trade deficit has many causes, the idea that tariffs can be a cure-all is dubious at best. Kenneth Rogoff is professor of economics and public policy at Harvard University. He was the IMF’s chief economist from 2001-03.© Project Syndicate More

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      The Guardian view on Trump’s shock therapy: warehouse and transport workers are the first victims of a class war | Editorial

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      The White House, eager to win a trade war it barely understands, has yanked the emergency brake on China-US trade without checking who’s inside the vehicle. Donald Trump’s early April trade decree has taken a month to hit the economy – that’s how long Chinese containers need to reach Los Angeles. And on cue, US pacific ports registered a 45% drop in container bookings this week from China. When warehouses fall quiet and trucks idle in California, the silence will creep eastward. Unemployment will surely tick upwards.Even if Washington reverses course by the end of May, and Beijing plays nice, the best-case scenario is delayed damage. Some goods are being rerouted to avoid charges, but you can’t reboot global logistics overnight. This isn’t strategic decoupling – it’s economic self-harm. By the time the Trump administration notices, it will be too late. The consequences of the US president’s rash tactics will reverberate through Main Street. Mr Trump offers a flippant excuse: blame 11-year-olds with too many dolls – not his own tariffs – for rising hardship.US gross domestic product just shrank for the first time in three years – despite Mr Trump’s promise of a “golden era”. His tariffs are steering the world toward a downturn. Even the International Monetary Fund (IMF) knows it. According to its latest modelling, the fund now sees the probability of global growth falling below 2%, a threshold widely seen as equivalent to a global recession, as approaching one in four. That’s double the risk it estimated six months ago. Escalating US tariffs, says the IMF, are the main reason behind the darkening skies.What does this mean for the world? Below 2% global growth, much of the per capita gains vanish. Most of what’s left is soaked up by expanding giants in Asia and Africa – places with the people and industrial catch-up capacity to grow even in a weakened global economy. The UK does not have this. Britain is an ageing, post-industrial economy in a productivity slump without the momentum of demographics or the slack of underdevelopment. That’s why Labour can’t afford to sit back. Rising living standards and real economic security require government to invest, build and redistribute – because the market alone won’t.Commentators still blindly cling to David Ricardo’s 1817 theory of comparative advantage – as if today’s global capitalism mirrors Georgian England’s trade in wine and cloth. It doesn’t. Ricardo assumed nations specialise based on domestic costs. But in a world of mobile capital, it’s companies that specialise, not countries. That’s what the economist Dani Rodrik warned in the late 1990s: free capital flows undermine comparative advantage. Development now depends not on obeying trade patterns, but on shaping them – through industrial policy.But Maga protectionism isn’t rebuilding US industry – it’s shock therapy. Mr Trump engineers a trade crisis to hike prices, kill off “uncompetitive” firms and clear the way for a leaner, capital-heavy economy. Meanwhile, tax cuts hand America’s oligarchic tendency even more power to reshape markets in its image. Mr Trump’s narrative promises a revival for US workers – particularly the unionised holdouts in places such as Detroit – but what they will get is higher costs, stagnant wages and patriotic slogans. This isn’t industrial policy. It’s class politics disguised as economic nationalism – a controlled demolition of what remains of US labour’s bargaining power, sold as a populist renaissance.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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      Trump says Biden caused the economic downturn. That’s malarkey | Steven Greenhouse

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      While Donald Trump delusionally asserts that “we’re celebrating the most successful first 100 days of any administration in American history”, last week’s economic news emphatically refutes that. Trump’s commerce department reported on Wednesday that the US economy – in a sharp and dismaying reversal – shrank in the first quarter of this year.That of course is when Trump returned to the White House, but Trump, true to form, denied that he was in any way responsible for the surprisingly bad economic news. Trump, who has spent his life blaming others and refusing to admit mistakes, was quick to blame Joe Biden for the downturn. The nation’s gross domestic product declined at a 0.3% annual rate in the quarter, after adjusting for inflation.At Wednesday’s cabinet meeting – where cabinet secretaries sounded like North Korean officials obsequiously extolling Kim Jong-un – Trump noted the bad first-quarter report and said: “This is Biden, and you can even say the next quarter is sort of Biden.” Later in the day in a speech to corporate executives, Trump continued to try to dodge responsibility, saying: “This is Biden’s economy.”Even the very careful New York Times said that Trump was full of it. The Times wrote that Trump “blamed his predecessor for handing him a bad economy, despite data showing that growth was strong when he took office”.When Biden left office, many economists had glowing words about the economy. “President Trump is inheriting an economy that is about as good as it ever gets,” said Mark Zandi, chief economist at Moody’s Analytics. “The US economy is the envy of the rest of the world, as it is the only significant economy that is growing more quickly post-pandemic than pre-pandemic.”With regard to the bad first-quarter GDP report, economists overwhelmingly agree that there was one overriding cause, and that cause was not Joe Biden. Rather, it was the huge uncertainty and fears stirred by the prospect of Trump’s tariffs. Eager to stock up on foreign goods before Trump imposed his wave of tariffs, US businesses rushed to increase their imports, and according to the formula used to calculate GDP, soaring imports have a downward effect on economic growth.Like the boy who would never admit he broke the cookie jar, Trump refused to admit that his tariffs had anything to do with the first-quarter downturn. For Trump, truth is a distant galaxy. It’s a foreign enemy that he is forever trying to repel. He stubbornly refuses to admit that the economy was in strong shape when he took office, just as he shamelessly refuses to admit that “MS-13” was Photoshopped on to the knuckles of Kilmar Ábrego García, an immigrant who was wrongly deported to a brutal prison in El Salvador. Far too often, Trump seems allergic to the truth. During an interview with Terry Moran of ABC News, he brazenly insisted that Moran accept Trump’s falsehood about Ábrego García, telling him: “Why don’t you just say: ‘Yes, he does’” have MS-13 tattooed on his knuckles.It’s as delusional for Trump to claim that “we inherited from the last administration an economic catastrophe”, as he did in a speech to a joint session of Congress in March, as it is for him to insist that Ábrego García’s knuckles say “MS-13”.When Biden left office, no economists were forecasting a recession anytime soon – that’s why Wednesday’s report that the economy shrank in the first quarter was such a surprising reversal. During last year’s fourth quarter, Biden’s last full quarter in office, the nation’s GDP grew at a solid 2.4% rate. Indeed, ever since the Covid-19 pandemic ended, economic growth in the US was considerably stronger than in Britain, Germany, France, Japan and other G7 nations. Several weeks before election day, the Economist magazine ran headlines saying the US economy was “the envy of the world” and had “left other rich countries in the dust”.When Biden’s term ended, the jobless rate was a low 4.0%. Not only that, during Biden’s four years, the average unemployment rate was lower than for any president since the 1960s. Trump won over many voters by attacking high inflation under Biden – and it was a serious problem – but by the time Biden left office, inflation had slid to just 2.9%, far below its 9% peak in 2022 and nearly down to the Federal Reserve’s inflation goal.As part of his economic disinformation efforts, Trump has repeatedly said that job growth was a disaster under Biden. Sorry, Donald, that’s a lie. The fact is that during Biden’s four years, the US added 16.6 million jobs, more than during any four-year term of any previous president. (Trump will never tell you this, but during his first term, the nation lost 2.7 million jobs overall, making his first-term presidency the first presidency since Herbert Hoover’s to suffer an overall loss in jobs. The pandemic was largely responsible for that.)As part of his never-ending effort to dodge responsibility, Trump blamed Biden for the stock market’s recent troubles. During Trump’s first 100 days, the S&P 500 fell 7%, making it the market’s worst beginning to a presidential term since Gerald Ford took office in 1974 after Richard Nixon resigned due to the Watergate scandal.Devious as ever, Trump posted on Truth Social on Wednesday: “This is Biden’s Stock Market, not Trump’s. I didn’t take over until January 20th.” What Trump failed to say was that the stock market didn’t begin to plunge until 2 April, when he announced his steep, worldwide “liberation day” tariffs. That was more than two months after Biden left office – so it’s absurd for Trump to blame him for that decline. And don’t expect Trump to ever acknowledge that Wall Street soared during Biden’s four years. The Dow Jones Industrial Average climbed 39% and the S&P 500 soared by 55.7%, including a 28% jump during 2024.Jared Bernstein, who was chair of the council of economic advisers under Biden, said on MSNBC on Thursday that it was ludicrous for Trump to blame Biden for the first-quarter downturn. “I have never seen a more direct connection to what we’re seeing in the economy and stock market to the action of one person, which is to President Trump and his trade war,” Bernstein said.Many economists warn that the US economy may sink further in the second quarter due to Trump’s tariffs as some supply chains break down, some imports dry up, prices rise on many goods and many consumers and business pull back on spending due to all the uncertainty and anxiety.John Kasich, a Republican and former governor of Ohio, sneered at Trump’s efforts to weasel out of responsibility. “You can’t blame Biden,” he said. “It’s like saying the dog ate my homework.”

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

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      Trump’s tariffs get one thing right: capitalism is changing | Avram C Alpert

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      Trying to understand Donald Trump’s across-the-board tariffs based solely on economic theory won’t work. As the US president himself said: “Chronic trade deficits are no longer merely an economic problem, they’re a national emergency that threatens our security and our very way of life.” That may be why, as many economists have pointed out, there’s simply no good economic case for his plans.But few commentators have understood that facts and figures aren’t the whole point of the tariffs. As always, economics is part of a broader political vision. The tariffs help Trump make his claim that a way of life is under threat and he alone can protect it.Indeed, the political meaning of Trump’s tariffs is in the idea itself: “protectionism”. He is not just telling people that he’s going to improve the economy. He’s signaling that he’s going to protect a way of life, even – or especially – if it hurts others, by creating, in theory, good-paying factory jobs that could sustain local communities. (Never mind that the key to any industry’s ability to sustain communities are the practices of labor organizing Trump opposes.) On the campaign trail, he said: “Whether the women like it or not, I’m going to protect them.” He’s now saying the same thing to the country as a whole.Such non-economic justifications for economic policy are nothing new. They are part of what the sociologist Max Weber called “the spirit of capitalism”. Weber argued that capitalists had to justify a claim unique in human history: profit is good. For millennia before, philosophers had argued the opposite. Jesus, for example, told his disciples that it was likelier for a camel to go through the eye of a needle than for a rich man to get into heaven.But with capitalism, the pursuit of profit became good. How did it justify this? Weber said that’s where “spirit” comes in. He pointed to notions of work as a holy value in Protestantism and Calvinist ideas about how monetary success proved you were among God’s chosen few. These spiritual views engendered a work ethic and made capitalist excess palatable. At least for a time.When capitalist greed becomes unpalatable, new spirits emerge. To understand Trump’s protectionist spirit, we have to understand this preceding history.After the Great Depression, people saw that they might lose everything no matter how hard they worked and so the work ethic spirit lost its power. In its place, social democratic states gave a new collectivist spirit to capitalism. Social democracy limited excess and provided a moral logic by offering stability to all through a linked system of jobs and life-long public services.This collectivist spirit began to break down in the 1960s under the pressures of stagflation, oil shocks, and criticisms of a conformist, consumerist lifestyle. In response, capitalism’s spirit transformed itself again. According to two scholars of this transitional period, Luc Boltanski and Ève Chiapello, it did so by ingeniously incorporating the criticisms: it became about nomads, connections, flexibility, creativity.It was no longer the staid cubicle office man; it was now the exciting creative entrepreneur who knows no allegiances and is at home in the chaos of disruption. Hence Silicon Valley. Hence the destroyed manufacturing bases where jobs were converted to low-wage poverty traps and where Trump now finds many of his most loyal supporters. Hence his protectionist vision of a new spirit of capitalism.There is some merit in this desire to help those who lost out, but, as Weber noted, the spirits of capitalism can mask more sinister desires. By also pushing massive tax breaks for the wealthy, Trump is hoping that tariffs can provide rhetorical appeal without radically changing the social order.The tariffs say: we will protect your community by hurting those who profited off your pain and became rich through globalization. That’s why Trump blamed “globalists” for the dip in the stock market after the tariffs were announced: “A lot of [those selling stocks] are globalist countries and companies that won’t be doing as well … Because we’re taking back things that have been taken from us many years ago.” But that ignores the real ways in which jobs have been lost and communities upended. What the tariffs leave unsaid is that they won’t address the real issues underlying today’s economic pain: gutting welfare, failing to retrain workers, under-utilizing technology, and letting inequality rise relentlessly.Trump is right that capitalism, in a period of untrammeled greed and injustice, needs a new spirit to show it the way. But the trouble with a protectivist spirit is that it implies that some get protected while others get hurt. That will just create new cycles of dismay – as we are already seeing with the tariff whiplash and draconian immigration policies.What we need is a democratizing spirit, one that isn’t about protecting some and hurting others, but instead guides us to work collectively to ensure that all people can lead decent and meaningful lives even in a chaotic world. There are economic policies for this, such as fair trade, meaningful industrial policy, more worker representation on corporate boards, and more cooperatively owned businesses.But Democrats also need to learn from Trump and emphasize the spirit. They need to show that their democratic vision is not just technocratic, but as powerful and affirming as the feeling of being protected.The desire for this spirit may be why the rallies of Bernie Sanders and Alexandria Ocasio-Cortez have drawn record crowds. Most attenders say they aren’t there to hear the policies, which they already know. They’re there for the “community”, and to experience the “closest thing to a version of America you actually want to live in”, one that works for all of us. If the Democratic party can catch that spirit, they will not only win elections; they might just bring an end to decades of destruction.

      Avram Alpert is a lecturer in the Princeton Writing Program. His most recent book is The Good-Enough Life More

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      Donald Trump’s cartoon-like chaos leaves US economy on unstable course | Heather Stewart

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      Ten days reporting from the US – in Pittsburgh, Washington DC, and just across the Potomac River in Arlington, Virginia – gave me a fascinating snapshot of what feels like the slow-motion unravelling of the world’s largest economy.So many conversations featured uncertainty and wariness; and weariness, too, as businesses and consumers weigh up every decision, against the backdrop of the chaos emanating from the White House.Even the president conceded last week that the economy was in a “transition period”, claiming he had warned of this during his campaign. (When challenged, the White House could not come up with any examples of when he had done so.)The problem for Trump and his supporters, many of whom remain staunchly loyal, is that the transition period in question is starting to resemble that felt by the classic Looney Tunes character Wile E Coyote between charging off a cliff into midair and plunging to the ground.So far, the hard data from the US economy is holding up well. Friday’s payrolls report was strong, and the negative first quarter gross domestic product reading, while worrying, was hard to take a clear reading from because of the rise in imports as companies stocked up ahead of tariffs.There is little sign of anything as dramatic as mass job cuts, or a sudden stop in consumer spending – although the recent crop of data mainly relates to the period before “liberation day”.Look at the forward-looking surveys, though, and there are clear signs of anxiety. The long-running Michigan consumer sentiment index just had its steepest quarterly decline since the 1990 recession.Spend any amount of time talking to US consumers and businesses, and it is abundantly clear why: there are so many sources of policy ambiguity as to make the future not just uncertain but completely unknowable.There is a cliche that “markets hate uncertainty”, but in truth the same applies to everyone in the real economy, too: the company wondering what size order to put in and how many people to hire and the family thinking about buying that fridge or booking that holiday.It is not surprising they are uncertain. No one, even inside the administration, can say with any confidence what the tariff rates on imports from specific countries will be in July.Even if the tariff policy was crystal clear, its impact on prices would be hard to gauge – depending, as it does, on how much of the cost companies are willing to bear (or “eat”, as the Americans have it) at the expense of reduced profits, and how much is passed on to consumers.For the moment, as the Treasury secretary, Scott Bessent, has admitted, the tariffs on China, at 145%, are now so high as to amount to an effective trade embargo.Not every company will have the deep pockets and global reach of Apple to be able to bend its supply chain away from China to manufacture products for the US elsewhere (in the iPhone-maker’s case, India). Instead, many will be scrambling to find substitutes, which may be more expensive or not exist at all. Shortages of some products seem a distinct possibility.At the same time, sharp cuts in federal budgets, many of which have an ideological taint, including Robert F Kennedy Jr’s decimation of the National Institutes of Health, are raising short-term questions about unemployment and much longer-term worries about the US’s world-leading science base.Some of the most heartbreaking conversations I had were about aspects of Trump’s immigration policy: the man who said a Guatemalan friend’s six-year-old son had stopped going to school in case his mum was snatched by the authorities while he was there, and the restaurant manager who said it was becoming harder to hire Latinos because even fully documented workers feared they could face deportation anyway.skip past newsletter promotionafter newsletter promotionThese are first and foremost human tragedies, but clearly they also have an economic dimension. The credit rating agency Fitch warned in a report last week: “Risks associated with mass deportations could include potential worker shortages, production delays and increased wage inflation that hinders revenue growth, weakens profitability and lowers return on investment.”Of course, because the US economy’s abrupt gearshift has been driven by deliberate policy actions, it’s tempting to think: “It doesn’t have to be like this.”Much more of the real economy impact so far results from this widely shared uncertainty – or perhaps it is better to call it fear – than from the specifics of Trump’s policies.Business owners told me that if they just knew what the final tariffs on products from the various countries in their supply chain would be, for example, then over time they could adapt.It is not completely out of the question that a more settled policy position could arrive in the coming weeks.Certainly, Bessent appears to be trying to manoeuvre Trump towards striking a series of “deals” (in effect, promises of concessions in exchange for tariff carve-outs) with key economies.Yet the president appears to have such a love of political drama – and such an inability to choose a course and stick to it – that the unknowability of future policy seems to be the very essence of Trump 2.0.It seemed to be the mighty bond markets, driving up the cost of US borrowing, that checked Trump’s initial “liberation day” drive, prompting the “pause”.But if time drags on with no agreements in sight, the next wave of distress signals are likely to come not from Wall Street but from main street – in soaring prices and empty shelves. How Trump responds then is anyone’s guess. More

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      One hundred days in, Donald Trump faces a problem: he can rage, but he can’t govern | Jonathan Freedland

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      He says it’s the “best 100-day start of any president in history”, but you can file that along with his boast about crowd sizes and his claim to have won the 2020 election. In truth, the first three months of Donald Trump’s second presidency have been calamitous on almost every measure. The single biggest achievement of those 100 days has been to serve as a warning of the perils of nationalist populism, which is effective in winning votes but disastrous when translated into reality. That warning applies across the democratic world – and is especially timely in Britain.Start with the numbers that matter most to Trump himself. A slew of polls appeared this week, but they all told the same story: that Trump’s approval ratings have collapsed, falling to the lowest level for a newly installed president in the postwar era. He has now edged ahead of his only rival for that title: himself. The previous low watermark for a president three months in was set by one Donald Trump in 2017.Back then, 42% of Americans approved of the way Trump was doing his job. The latest Ipsos survey for the Washington Post/ABC News has Trump at just 39%. This, remember, is meant to be the honeymoon period, yet Trump is 10 points behind where Joe Biden stood at this point, 30 points behind Barack Obama and 44 points behind Ronald Reagan. Remember: US presidents tend to get less, not more, popular as time goes on.Perhaps most significant is that Trump is weak even in those areas where he’s meant to be strong. Confidence in his ability to handle immigration has tumbled and the same is true, even more critically, of his management of the US economy. On the latter, just 37% back Trump, a depth he never plumbed during his first term, even as the economy seized up under Covid. For the first time since 2001, a majority of Americans believe their economic situation is getting worse.With good reason. Because the economic data is almost as troubling for Trump as his poll numbers. This week, official figures showed that the US economy contracted by 0.3% in the first quarter of the year, further fuelling fears of a recession. Trump wasted no time in blaming the shrinkage on Biden, who was in charge for just 20 days of the first three months of 2025, an argument only slightly weakened by the fact that the last quarter with Biden in charge saw growth of 2.4%.It’s a precipitous drop, and the cause of it is hardly mysterious. Economists agree that the culprit is Trump’s tariffs, which prompted a surge in imports, as companies scrambled to buy in goods from abroad before the president’s on-again-off-again levies kicked in. Because those imported goods and services are not produced in the US, they’re subtracted from the headline GDP figure. Hence the contraction. Meanwhile, the chaos and volatility unleashed by Trump’s tariff policy has dented consumer confidence, now down to its lowest level since the recession of 1990, leaving Americans hesitant to spend money amid so much uncertainty. Even though the latest job numbers look healthy, analysts say the underlying picture is alarming. As Bloomberg reports, “corporate investment plans and expectations for growth and jobs have all plummeted – and the key reason is Trump’s trade war.”Trump knows that the warnings from retail giants Walmart and Target, of empty shelves as supplies from heavily tariffed China dry up, have cut through. He addressed that anxiety this week, but in a way that should make even Trump’s admirers, those who usually praise his ability to connect with ordinary folk, worry that he’s losing his touch.Asked about potential shortages of toys at Christmas, Trump said, “Well, maybe the children will have two dolls instead of 30 dolls, and maybe the two dolls will cost a couple of bucks more.” Bit late in his career for Trump to don the saffron robes and preach a Zen flight from consumerist materialism. His two-toys remark – which strangely did not feature as one of his campaign pledges in 2024 – has already cast him as the Grinch set to ruin Christmas.“BE PATIENT!!!” he urges on his social media platform, as he insists that the vertiginous downward slide of the stock market either doesn’t matter or is all Biden’s fault. But the whiff of desperation is strong as Trump begins to see why the one idea he actually believes in and has believed in for decades – tariffs – is an object of near-universal contempt among economists. Yes, tariffs may have succeeded in persuading Apple to shift manufacturing away from China. But those jobs are not about to move to the US. Apple has announced instead that it will assemble its US-bound iPhones in India. Better restitch those red baseball caps with a revised slogan: make India great again.By now, you’ll recall, Trump was meant to have ended the wars in Ukraine and Gaza, indeed he promised to do that by 21 January. But after a brief ceasefire, Israel’s war against Hamas in Gaza has resumed, the Trump administration having apparently lost interest. As for Ukraine, Trump got to brag of a breakthrough this week, with an agreement that gives the US a stake in Ukraine’s mineral wealth. But it’s far from the deal he sought.The case he always made was that the US had to be reimbursed for the billions it had given Ukraine in military support under Biden – plucking the entirely bogus figure of $350bn out of the air. But this week’s arrangement includes no such payback. On the contrary, the deal is one Kyiv can look on with quiet satisfaction. It seems the Ukrainians could smell Trump’s need to have something to shout about in time for his 100th day, and they leveraged that eagerness to their advantage.As for his expansionist threats to gobble up Panama, Greenland and Canada, the only concrete result those have brought is defeat in Canada’s general election for the pro-Trump Conservatives and a back-from-the-dead success for the Liberal party that vowed to defy him. Such is Trump’s narcissism that he even boasted about that, citing it as evidence of how much he matters in the world. As he put it, just before Canadians voted: “You know, until I came along, the Conservative was leading by 25 points,” he mused. “I was disliked by enough of the Canadians that I’ve thrown the election into a close call.”The promise was that this second Trump term would be different, that the chaos and churn of Trump 1.0 would be gone. But on Thursday, we were back to the good old days, with the firing of his national security adviser, Mike Waltz, partly for his accidental admission of a journalist into a Signal group chat that discussed attack plans for Yemen, partly for advocating a tougher stance on Vladimir Putin, and partly for earning the hostility of far-right conspiracist Laura Loomer, who has the ear of the president.So it’s fair to say the 100 days have not gone as Trump would have wished. And thanks to those serial failures, you can see the first, small signs that his power to terrify is fading. Witness the handful of senate Republicans who voted with Democrats against his tariff policy. And note how the reliably rightwing editorial page of the Wall Street Journal is now a fierce critic, slamming Trump as a “bully” and denouncing tariffs as “the biggest economic policy mistake in decades”. For a few short hours, even Jeff Bezos seemed ready to take a stand, amid reports that Amazon was about to itemise the cost of tariffs to US customers, before the company backed down.Of course, none of this should be a surprise. Trump’s conman promises and delusional dreams of turning the clock back were always bound to fail. This is the nature of nationalist populism, whether it wears a red cap in Michigan or a turquoise rosette in Runcorn. It is expert at turning grievance, division and nostalgia into votes. But when it comes to governing, it will always fail. It offers an outlet for complaint – and has no answers at all.

      Jonathan Freedland is a Guardian columnist More

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      The truth is finally dawning on Britain: toadying to Trump has got us nowhere | Emma Brockes

      by

      It’s not funny, of course – livelihoods if not actual lives depend on reaching a workable accord. But the news that President Trump has probably stiffed the UK into a second- or third-tier boarding group for trade talks, behind South Korea and Japan, triggers at least a snort of recognition for anyone who has experienced versions of that dynamic. The phrase “British negotiators are hopeful” followed almost immediately by use of the word “disappointed” in heavy rotation takes you, with grim amusement, back to every toxic relationship in which you have played Britain to someone else’s America.We are talking, of course, about the wisdom or otherwise of appeasing a man many think of as a tyrant, and the main takeaway from the Guardian’s story on Tuesday is that no matter how the UK pretzels itself to fit Donald Trump’s requirements, none of it will make any difference. Or rather what difference it makes, beyond the immediate relief enjoyed before the flattery wears off, is likely to be negative. It’s a rule of extortion that demands will increase with each capitulation, as Columbia University is finding out to its cost. (After caving to Trump’s demands last month in return for the restoration of $400m in federal funding, the university has not, in fact, had its funding restored. Instead Trump officials have told Columbia its concessions only represent the “first step”.)And now the UK finds itself in a similar pickle to Columbia, with any goodwill generated by King Charles’s letter inviting Trump to Balmoral apparently thrown up in the air. (One thing I’ll say for the royals is that their use of passive-aggressive semiotics in the invitation are absolutely world class: Balmoral is a mid-list palace that, while superior to Blenheim, which Trump visited in 2018 and is basically an off-site for corporate events these days, is decidedly not Buckingham Palace – a subtlety we must assume the king and his cohorts are thoroughly enjoying and Trump has no idea about whatsoever.)Anyway, where does any of this leave the UK? For now, at least, belligerence seems to be getting the better results with Trump, at least for those negotiators who have something he wants. Trump has blinked repeatedly when faced with the negative consequences of his own erratic behaviour, be that from tech companies forcing him to exempt them from tariffs or business leaders persuading him, in the wake of his commitment to putting 145% tariffs on Chinese goods, to wobble and admit they’re not sustainable.The fact is that Apple, Target and Walmart all have greater leverage over Trump than the UK does, which is why watching this latest episode of the special relationship unfold brings on, at least in British viewers, feelings of something like pathos. How many times will we keep going back? Clearly the prime minister’s jolly humouring secures better outcomes than Volodymyr Zelenskyy’s first approach at the White House, which has since been corrected to a necessary attitude of fealty. Meanwhile Canada, of all places, is now the nation telling the US in the most strident terms to take a step back and get stuffed.As in all these things, it’s the hope that kills you. Maybe if Britain says exactly the right words in the right order, keeps its breathing to a minimum, manages not to say anything annoying until we’re on the other side of the trade deal, lowers its eyes away from Europe or other allies that might trigger the rage of the aggressor, and continues to laugh at his jokes and listen to his stories, it will succeed in changing the pattern of Trump’s behaviour.The fact that this outcome is considered in any way achievable is perhaps the saddest thing of all. It’s an odd quirk of British-American diplomacy that, despite the vast disparity in power and wealth between the two countries, the sense of exceptionalism on both sides is probably equal. We really do believe we can talk our way out of anything, even when dealing with someone as capricious as Trump – a man for whom no amount of appeasement will hold longer than his mood. The king will be mobilised. The choice of Balmoral for Trump’s summer visit will rest in part on the fact that it’s harder for demonstrators bearing helium-filled balloons in the shape of Trump-as-a-baby to reach.And the diplomatic game will continue. Nothing Trump does seems strategic, but it seems both a calculated humiliation and a warning shot to steer clear of Europe to push the UK down the running order of trade talks. The question, then, becomes one of whether Britain’s poker face is a piece of canny diplomatic froideur and blithe UK negotiating or the uncertain actions of the party in an abusive relationship who understands that the moment of greatest danger is when you try to leave.

      Emma Brockes is a Guardian columnist More