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      It is difficult to imagine a post-American world. But imagine it we must | Nesrine Malik

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      “People speak with forked tongues about America,” a veteran foreign correspondent once said to me. It was a long time ago – during a debate about whether the US should intervene in a foreign conflict – and I have never forgotten it. What they meant was that just as the US is condemned for foreign intervention in some instances, it is also called upon to do so in others and then judged for not upholding its moral standards. That dissonance persists, and is even more jarring as we approach the 100th day of Donald Trump’s second term. There is a duality to how the US is seen: as both a country that wantonly violates international law and as the only one capable of upholding that system of law and order. This duality, always tense, is no longer sustainable.I have felt this ambivalence myself – the contradictory demand that the US stay out of it but also anger that it is not doing more. In Sudan, Washington frustratingly refuses to pressure its ally, the UAE, into stopping pumping arms and funding into the conflict. But what proof or history is there to support the delusional notion that the US cares about a conflict in which it has no direct interest? It is an expectation of moral policing from an amoral player that I remember even in childhood, after Iraq invaded Kuwait and the Arab world was rocked with fear of regional war. A fierce debate in our classroom in Sudan on the merits of US intervention was silenced by one indignant evacuee from Kuwait, who said that the most important thing was to defeat Saddam Hussein. Her words occasionally echo in my mind: “We must deal with the greater evil first.”Even in Gaza, as Congress passed package after package of billions in military aid to Israel, there remained some residual hope – long extinguished now – that the phone call to Benjamin Netanyahu would finally come. And even as Trump emboldens Vladimir Putin, abandons Ukraine and slaps tariffs on allies, you can detect that belief in the fundamental viability of the US as an actor that can still default to rationality, and even morality.But, for the first time that I can remember, the conversation is going in a new direction. The appeals to the difference between the presidency and other more solid US institutions are quieter now, as universities, law firms and even parts of the press kowtow to their erratic new king. The questions now being asked are about how Europe and the rest of the world can pivot away from the US, from its USAID programmes nestled within the health budgets of developing countries, and its global system of military assistance and deterrence. But they sound less like practical suggestions and more like attempts to get heads around a reality that is impossible to countenance.The challenge is technical and psychological. It is difficult to imagine a post-American world because America crafted that world. When the US becomes a volatile actor, the very architecture of the global financial order starts to wobble. We saw this in the crisis of confidence in the dollar in the aftermath of Trump’s “liberation-day” tariffs. The robustness of the rule of law and separation of powers – cornerstones of confidence in an economy – are also now in doubt, as the administration goes to war with its own judiciary and the president himself boasts about how many people in the room with him made a killing out of his stock market crash. Is it insider trading if your source is the president?Just as formidable is the mental task of divestment from the US. A friend who holds a green card but lives under an illiberal regime in Asia told me that, deep down, he always felt protected from the dangers of his country’s domestic politics by the knowledge that there was a safe haven to which he could retreat in case of persecution. No longer, as legal residents and visitors are hounded by Immigration and Customs Enforcement (Ice) or turned away at the border. I know others who have cancelled work trips to the US for fear of deportation or blacklisting. With that insecurity comes an awareness that, for some in the global south who always knew that the US was not a benign presence, there was still the belief that there was something within its own borders that curbed its excesses. This was partly true, but also a reflection of US cultural power. The pursuit of liberty and the pursuit of happiness, “give me … your huddled masses”, the Obama hope iconography; all resonant and powerful touchstones. They are now reduced to dust. It is one thing to know that the US was never the sum of these parts, but another to accept it.And there is a fear in accepting it. Because, for all its violations, the advent of a post-US world induces a feeling of vertigo. A world in which there is no final authority at all might be scarier than a world where there is a deeply flawed one. What is daunting is the prospect of anarchy, a new world where there is no organising principle in a post-ideological, everyone-for-themselves system. Not a cold war order divided into capitalist, communist and non-aligned. And not a post-cold war one divided into western liberal overlords, competing non-democracies and, below them, smaller clients of both.But what the US’s breakdown should really trigger is not overwhelm and bewilderment, but a project to build a new global order in which we all have a stake. What the US chooses to do in terms of foreign and economic policy can affect your shopping basket and the very borders of the nation state in which you live. It remains the world’s largest economy, has the world’s largest military, and is the home of the world’s most powerful entertainment complex. This centrality combined with its collapse reveals the fact that the problem goes deeper than Trump. The world was always dangerously overexposed to whatever direction the US took.Ironically, this all might be the beginning of a process that leads to genuine “liberation days” for other countries, but not the US itself. There is pain ahead, but also a sort of independence. Above all, there might finally be a recognition that the US’s definition of peace and prosperity was always its own, enforced by sheer force of power and propaganda.

      Nesrine Malik is a Guardian columnist

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      Trump warns exemptions on smartphones, electronics will be short-lived, promises future tariffs

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      The exemption of smartphones, laptops and other electronic products from import tariffs on China will be short-lived, top US officials have said, with Donald Trump warning that no one was “getting off the hook.”“There was no Tariff ‘exception’, Trump said in a social media post on Sunday. “These products are subject to the existing 20% Fentanyl Tariffs, and they are just moving to a different Tariff ‘bucket.’”In the post on his Truth Social platform, Trump promised to launch a national security trade investigation into the semiconductor sector and the “whole electronics supply chain”.“We will not be held hostage by other Countries, especially hostile trading Nations like China,” he added.The White House had announced on Friday the exclusion of some electronic products from steep reciprocal tariffs on China. US stock markets were expected to stage a recovery after the announcement. Shares in Apple and chip maker Nvidia were on course to soar after tariffs on their products imported into the US were lifted for 90 days.China’s commerce ministry said the exemption demonstrated the US taking “a small step toward correcting its erroneous unilateral practice of ‘reciprocal tariffs’,” and insisted Washington cancel the whole tariff regime.Zhang Li, president of the China Center for Information Industry Development, told state media outlet, China Daily, that the exemptions proved “how important China is to major US tech companies that rely heavily on the country for manufacturing and innovation”.However, Trump’s commerce secretary, Howard Lutnick, said on Sunday that critical technology products from China would face separate new duties along with semiconductors within the next two months.Lutnick said Trump would enact “a special focus-type of tariff” on smartphones, computers and other electronics products in a month or two, alongside sectoral tariffs targeting semiconductors and pharmaceuticals. The new duties would fall outside Trump’s so-called reciprocal tariffs on China, he said.“He’s saying they’re exempt from the reciprocal tariffs, but they’re included in the semiconductor tariffs, which are coming in probably a month or two,” Lutnick said in an interview on ABC, predicting that the levies would bring production of those products to the United States. “These are things that are national security, that we need to be made in America.”The world’s two largest economies have been locked in a fast-moving game of brinkmanship since Trump launched a global tariff assault that particularly targeted Chinese imports. China’s leader Xi Jinping said on Monday that protectionism “leads nowhere” and that a trade war would have “no winners”.Tit-for-tat exchanges have seen US levies imposed on China rise to 145%, and Beijing setting a retaliatory 125% levy on US imports. On Friday Beijing said it would ignore any future raises in tariffs by Trump, as they were already so high that there was “no market acceptance for US goods” in China.On Monday a spokesperson for China’s Customs agency said the country’s exports were facing a complex and severe external situation but “the sky will not fall”. They said China’s domestic demand was broad, and they were building a diversified market.Trump’s back-and-forth on tariffs has triggered the wildest swings on Wall Street since the Covid pandemic of 2020. The benchmark Standard & Poor’s 500 index is down more than 10% since Trump took office on 20 January.After announcing sweeping import taxes on dozens of trade partners, Trump abruptly issued a 90-day pause for most of them. China was excluded from the reprieve.The fallout from Trump’s tariffs – and subsequent whiplash policy reversals – sent shock waves through the US economy, with investors dumping government bonds, the dollar tumbling and consumer confidence plunging.US senator Elizabeth Warren, a Democrat, criticised the latest revision to Trump’s tariff plan, which economists have warned could dent economic growth and fuel inflation.“There is no tariff policy – only chaos and corruption,” Warren said on ABC’s “This Week,” speaking before Trump’s latest post on social media.China has sought to strengthen ties with neighbouring countries amid the escalating trade war. Xi will visit Vietnam on Monday as he begins a tour of south-east Asia.With Reuters and Agence France-Presse More

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      US stock markets expected to recover after Trump drops tariffs on mobiles

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      US stock markets were expected to stage a recovery on Monday after Donald Trump excluded imports of smartphones and laptops from his tariff regime late on Friday night.Shares in Apple and chip maker Nvidia were on course to soar after tariffs on their products imported into the US were lifted for 90 days.The temporary reprieve was widely seen as a climbdown after pressure from Republican leaders concerned that the soaring cost of smartphones would spark a voter backlash. US retailers import about 80% of all smartphones, many of them from China, which Trump has slapped with tariffs totalling 145%.US Customs and Border Protection said items like laptops, hard drives, smartphones, flat-panel monitors and some chips would qualify for the exemption. Vital machines made outside the US that are used to make semiconductors were also excluded.It means these products will avoid the China tariff and the 10% baseline tariffs applied on other countries caught by the new regime.Speaking on Air Force One on Saturday evening, Trump said he would be more specific about the latest exemption rules on Monday. “We’ve been making a lot of money,” he said. “It’s been the other way around. Other countries, in particular China was making a lot of money.”It is not clear how long the exemption will last or whether separate tariffs will be negotiated on the specific products.China has responded with a tariff on all US exports of 125%. Beijing said at the weekend that the reprieve for smartphones was a “small step” toward easing the trade fight between the world’s two biggest economies.skip past newsletter promotionafter newsletter promotionHowever, the US commerce secretary, Howard Lutnick, said the reprieve was likely to be lifted in 90 days and reiterated Trump’s longstanding plan to apply a different, specific levy to the sector.Speaking on NBC, he said: “All those products are going to come under semiconductors, and they’re going to have a special focus-type of tariff to make sure that those products get reshored. We can’t be relying on China for fundamental things that we need.”Lutnick dismissed interpretations of Trump’s reprieve that argued it reflected the president’s realisation that his China tariffs were unlikely to shift more manufacturing of smartphones, computers and other gadgets to the US in the near future.On Sunday Trump warned that no country would be getting “off the hook” on his punishing tariffs, again singling out China for criticism. “NOBODY is getting ‘off the hook’ for the unfair Trade Balances,” Trump wrote in a post on his Truth Social platform. “Especially not China which, by far, treats us the worst!”Apple has spent decades building up a finely tuned supply chain in east Asia, including inside China. The firm has pledged to move some facilities back to the US over the next four years, which will cost it $500bn, including constructing a giant factory in Texas for artificial intelligence servers but was expecting to retain much of its international network as it expands its sales.Trump’s move at the start of April to impose tariffs on imports to the US battered the stocks of tech’s magnificent seven – Apple, Microsoft, Nvidia, Amazon, Tesla, Google parent Alphabet and Facebook parent Meta Platforms.At one point, they lost $2.1tn, or 14% of their value, from 2 April. Shares have recovered since last Wednesday after Trump paused the tariffs except on China, allowing tech firms to use India and other conduits to import smartphones. More

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      Worried about your stock market savings as Trump tariffs wreak havoc? Don’t panic

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      This week was enough to make anyone worried about their stock market savings. As a certified public accountant, I don’t give investment advice. But I’m comfortable leaving my money in the stock market. Why? Let’s put things into perspective.Markets are still way upMany younger millennials and gen Z-ers may be panicking about recent falls in the market. But we’ve been here before – and worse. In March 2009, the Dow Jones Industrial Average lost more than half its value from the levels it reached less than two years before. In the past 15 years it has increased sixfold.Today’s economic problems are not as severe as 2009. Corrections happen, and rumors move markets. Which is why the Dow Jones average is down about 15% from its high back in November. However, it’s still at the highest level it’s ever been from before late 2022.Despite losses – and there will always be more losses – overall, people who invested in the markets over the past decade are still in very good shape.The economy is OKLast month the economy added more than 228,000 jobs, despite shedding hundreds of thousands of government workers. Meanwhile, other indices remain strong. True, manufacturing slipped into contraction last month – but that’s not really news, considering that – other than a few blips – it has been in contraction for years. Service industries are in their ninth consecutive month of expansion. Unlike 2009, capital is available and our banking system is strong. Consumers continue to spend. Wages are outpacing inflation.It’s too early to judge Trump’s tariff movesYes, Donald Trump’s trade war is disruptive. Maybe in the next few months – or a little longer – the smoke clears. We’ll see how this plays out. Maybe Trump’s decision to force the US economy to “take the medicine” so early in his administration aims to time this upside towards the end of his term. I wouldn’t be surprised to see more market volatility based on rumors, guesses and people trying to get attention for themselves. But I wouldn’t expect them to tank like they did in 2008.Growth policies under wayThere are also some very pro-growth policies under way and more coming.Like it or not, regulatory oversight from the federal government has already been scaled back thanks to a bunch of executive orders and the dismantling of agencies. This will help business owners keep their eye on their businesses, rather than the federal government. More importantly, both the House and Senate are moving to debate and then finalize a number of tax decreases which will include extending or making permanent many of the tax benefits from the 2017 Tax Cuts and Jobs Act as well potentially eliminating taxes on capital gains, overtime, social security and tips.All of this won’t happen, but some of it will and when it does consumers may have more in their pockets and businesses will enjoy a further long-term boost that should encourage more investment and growth.A cooling of inflation?The bond market thinks that inflation will cool down. That’s because bond yields have significantly decreased over the past few weeks. When inflation is expected to fall, so do yields. These traders think that – despite tariffs – there will be enough of a slowdown to dampen price increases and encourage the Federal Reserve to lower interest rates. Will the slowdown cause a recession? Maybe. But lower interest rates mean a lower cost of borrowing. It also helps reduce the government’s spending towards paying down debt.One big beneficiary of lower interest rates would be the residential real estate industry – which represents up to 18% of the US economy. Many homebuyers (and sellers) have been holding back due to higher interest rates. But now that bond yields are falling, so too are mortgage rates (which are also based on future inflation). In late 2023 the average mortgage rate was about 8%. Now it’s close to 6.5%. We’re getting close to a tipping point that could ignite this market. As we head into the spring and summer I would expect to see more buyers and sellers come out of hiding.I’m sure plenty of economists, academics and pundits will argue with these takes. The bottom line: don’t sell your stocks. Hold firm. History shows that, unless you speculate or get lucky with an isolated home run, investing in the broad stock market via mutual and index funds generally outpaces all other investments. If you have excess cash, consider putting more into these funds. Of course, consult a competent wealth adviser and evaluate your specific risks. But relax. You’ll be fine. More

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      Michigan autoworkers wary of Trump’s tariffs: ‘Playing poker with people’s lives’

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      The General Motors Flint Assembly plant is a hulking symbol of American auto industry might, a 5m-sq-ft factory stretching as far as the eye can see down Van Slyke Road, and it hums: three shifts almost daily crank out the Silverado truck, the automaker’s most popular product.The plant weathered decades of industrial disinvestment in Flint, a blue-collar city of about 80,000 in mid-Michigan, the nation’s auto capital. Flint Assembly remains an economic cornerstone of a Rust belt region filled with working-class swing voters who helped propel Donald Trump to his second term.The president did well here in part because he promised an industrial revival that will regenerate towns like Flint. On the campaign trail he promised tariffs would achieve this goal. This week the tariff war kicked into a higher gear. The reviews are mixed.Autoworkers, small business owners and residents here say tariffs could help Flint, but many aren’t comforted by what they characterized as Trump’s haphazard approach, higher prices on everyday goods and the prospect of middle-income folks becoming “collateral damage”.“Trump is playing poker, but he’s playing poker with people’s lives at this point,” said Chad Fabbro, financial secretary of United Auto Workers (UAW) Local 538 in Flint. Even the union is a house divided. The UAW president, Shawn Fain, supports tariffs, but Fabbro said many of the 5,000-strong rank and file at Flint Assembly see them as “bullshit”.Onshoring industry is a good idea, if well planned, Fabbro added, but an abrupt, full-scale tariff war is “not good for anyone because middle America is going to suffer”.Before Trump partly pulled back on Wednesday, his unprecedented trade war enacted at least 10% tariffs on nearly every country in the world last week, while hitting China, Taiwan and Vietnam with much higher rates. The war with China has escalated.There’s little disagreement about whether the tariffs would cause prices to increase for everyday goods like clothing, electronics and groceries – some estimate it could cost the average US household $3,800.In Flint, the debate seems to be: “Is the president’s political and economic gamble worth it?”The president’s supporters say “yes”, and have pushed variations of a message: any economic pain will be worth the benefits of a restructured world economy. Among them is Brian Pannebecker, a retired Ford employee who started Auto Workers for Trump.“It’s going to cause a little short-term pain, but we’re going to have to endure it for six months or a year, however long it takes,” he said last week. “The workers of this country have been enduring pain for decades as they closed plants down.”But among small business owners in downtown Flint, there’s some doubt about the idea of more pain in one of the nation’s poorest big cities – about 35% live in poverty.“The person who said that must be coming from a place of privilege because it is obvious that they’re going to be OK for the next year or so, but I think a lot of people are not in the same boat, so we have to be mindful of that,” Rebekah Hills, co-owner of Hills’ Cheese, said on Tuesday.Her shop imports about half of its product from countries such as the Netherlands, France and England – the cost of those products would go up 10% under Trump’s latest plan, or more if he changes his mind. “It really sucks because it’s small businesses that suffer the most,” Hills added.Frustration with stubbornly elevated prices – especially among foods – was largely behind a relatively strong Trump showing in 2024 in Genesee county, where Flint is located. He had lost to Biden and Hillary Clinton here by about 10% in the two previous elections, but closed the gap to 4% last year. Just north, in Saginaw county, also part of Michigan’s auto industry heartland, the president edged out Kamala Harris.Democrats in Michigan, some of whom are fiercely critical of free trade agreements, are calibrating their messaging with these things in mind. Among those who support tariffs is US representative Debbie Dingell, whose district near Detroit is home to many rank-and-file autoworkers.“I think tariffs are a tool in the toolbox so that we are competing on a level playing field with China, who subsidizes production, owns the companies and doesn’t pay a decent wage,” Dingell recently told WDET. “But it can’t be done chaotically.”Trump’s approach was damaging the economy, she said, but she also noted that 90% of the nation’s pharmaceuticals are imported, and onshoring that kind of production was a good idea. But, Dingell added, “you can’t do it overnight”.On Wednesday, just after Trump pulled back on most tariffs, the conservative-leaning Michigan political analyst Bill Ballenger said he wasn’t surprised by the abrupt announcement. The tariff rollout wasn’t going well for Republicans in Michigan or nationally, he said. It was more “too much, too soon” from the administration.“The public understands the tariffs and they get his overall goal and mission, but the way he’s implementing them seems incoherent,” Ballenger said. However, what that may mean in 19 months when the next elections happen is anyone’s guess, he added.skip past newsletter promotionafter newsletter promotionWill Flint be OK?Alan Jackson, a retiree from an auto supplier, echoed the president’s line. “Why does China and everyone else get to take advantage of us? Why do they get to screw us? I’m glad someone is standing up to that.”Jackson dismissed the fears of higher prices and economic damage. “People will be fine – it’s worth it,” he added.But polls showed a major drop in Trump’s approval rating, and in downtown Flint people are worried.The Flint farmers’ market, in a repurposed newspaper printing press building, is a local economic hub where a half-million people annually shop for everything from locally grown produce to local jerky.But many here partly rely on imports. Tony Vu, a restaurateur and leader in the local food system, is about to reopen his Vietnamese restaurant, MaMang. The uncertainty is generating fear of supply chain shortages, Vu said: “It seems like deja vu, but with no end in sight.”The tariffs especially take a toll on south-east Asian, Latino and other chefs of color importing goods that can’t be produced here – avocados don’t grow in Flint, Vu noted, and Michigan’s growing season is only five months long. Imports are essential.A case of fish sauce, a staple of Vietnamese cuisine, went from about $82 to $100 just on the speculation that tariffs were increasing, highlighting another problem – some companies use disruptions to the economy as an excuse to raise prices, even if they don’t need to.“It’s going to take an industry that already operates on thin margins and is really hard, and it’s going to create more pressure,” Vu said. “If businesses are not quick enough to adapt, then it’s going to be a death blow.”At d’Vine Wines, with shelves full of bottles from France and Italy, manager Aaron Larson said on Tuesday he was not totally sure what to make of the tariffs yet, but he doesn’t trust Trump. Fabbro, of the UAW, pointed to massive increases in Canadian aluminum prices that were a threat to Michigan’s robust craft brewery industry. Meanwhile, his neighbors where he lives in rural Vassar, a few miles north of Flint, grow soybeans they sell to China.About 40% of US soybean exports go to China, which just hit them with an 84% tariff on all US goods (later raised to 125%). They’re scared, Fabbro said.‘That’s how capitalism works’Auto Workers for Trump’s Pannebecker said that corporations should “absorb” some increased costs, and added that the unions are trying to have it both ways – they want higher wages but they want cars to be affordable. Something might have to give, he said.“The market will settle itself out because that’s how capitalism works,” he said.The president’s supporters trust his judgment.“He’s a shrewd businessman, right? That’s why people vote for him, so I say let’s give it a chance, but if the cost of everything goes up then maybe he has to pull back at some point,” said Russ, an autoworker at the farmers’ market who would only give his first name.At the UAW local hall across from the Flint Assembly plant, Fabbro isn’t convinced, and fears layoffs. “It’ll only be a few years? OK, don’t feed your kids for a few years. Sell your boat and home and everything you’ve worked for because you’re willing to be a bargaining chip,” he said. More

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      No retreat on tariffs, Trump promised. Hours later, he blinked

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      He vowed: “My policies will never change.” He insisted: “Sometimes you have to take medicine to fix something.” He boasted: “I know what I’m doing.” And at 9.33am on Wednesday, he entreated: “BE COOL. Everything is going to work out well.”But less than four hours later, Donald Trump blinked. As the economic and political pressure became unbearable, the US president announced on social media that he would pause for 90 days higher trade tariffs for most countries, excluding China.It was a dramatic climbdown by a leader who has spent years cultivating the image of a strongman able to project indifference through every storm. White House aides immediately swung into gear, attempting to spin the retreat as the masterstroke of peerless dealmaker and genius chess player.The damage had been done, however. Damage to America’s standing as an honest broker and dependable ally. Damage to the US dollar and financial system as the world’s anchor of financial stability. And damage to Trump’s reputation on his signature issue, the economy, in the eyes of business leaders, Republicans and voters.“It’s obviously far too soon to talk about a failed presidency, but to me there are clear indications that Donald Trump’s presidency is endangered,” said Larry Jacobs, director of the Center for the Study of Politics and Governance at the University of Minnesota. “That’s an extraordinary statement for month three, but he’s taken such extreme measures and the responses are unusual, particularly for Republicans. They’re very demonstrative and they’re very directed at his power.”The past two weeks have witnessed the most volatile period for financial markets since the coronavirus pandemic lockdowns five years ago. This time, however, the cause is not a highly contagious virus but the grievances and whims of one man.On 2 April, standing in the White House Rose Garden, Trump announced sweeping “reciprocal” tariffs on dozens of countries, billing it as a “declaration of economic independence” on a “liberation day” that would restore America’s “golden age”. After decades of getting ripped off, he claimed, “it’s our turn to prosper”.The tariffs were calculated based on a country’s trade deficit with the US divided by the value of goods imported from that country. The formula was immediately criticised for inaccuracies and absurdities, such as assigning tariffs to Heard Island and McDonald Islands, which are inhabited entirely by penguins.Yet in Trump’s telling, the long-threatened tariffs were a necessary measure to restore US manufacturing and address trade imbalances. The Rose Garden event was attended by workers in hard hats and yellow construction vests – a reminder of how Trump has sought to steal Democrats’ identity as the party of the working class.Some analysts on the left and the right agree that the US industrial midwest was hit hard by globalisation with factories shuttered, communities hollowed out and jobs shipped overseas. But few believe that Trump, who for decades has believed that the US is getting ripped off, and his sledgehammer approach to tariffs are the right solution.Bill Galston, a senior fellow at the Brookings Institution thinktank in Washington, said: “I have always believed that his understanding of when America was great was in the 1950s and 1960s, when 30% of the workforce was in manufacturing and when the rest of the world was flat on its back and America bestrode the world like a colossus.“His dream is to restore that America to the greatest extent possible, and he genuinely believes that high tariff walls will force people who are doing manufacturing in China and all across south-east Asia and elsewhere to come here.”Galston added: “It is, most economists would say, a fantasy that could make a difference at the margins. Right now, manufacturing employment in the United States as a share of the total is 8%, down from its peak above 30% in the 1970s, and that’s not going to be reversed.”Trump had effectively taken the world economy hostage. The repercussions were immediate and widespread, including market instability, strong international condemnation, retaliatory measures from China and deep uncertainty for businesses and consumers.View image in fullscreenLarry Summers, a former treasury secretary, described it as “the biggest self-inflicted wound we’ve put on our economy in history”. Some chief executives who had backed Trump in last year’s election expressed buyer’s remorse as their fortunes sank. Tech giants such as Apple saw their stock prices drop; analysts predicted potential price increases for iPhones by as much as 43%.In the White House, Trump’s closest advisers were rattled. Elon Musk, the world’s richest man, engaged in a highly public and insulting feud with Trump’s trade adviser Peter Navarro over the impact of tariffs on Tesla, calling Navarro a “moron” and “dumber than a sack of bricks”.Trump insisted he was right and elite opinion was wrong. As he blithely golfed over the weekend, even as markets crashed and haemorrhaged trillions of dollars, the treasury secretary, Scott Bessent, flew to Trump’s Mar-a-Lago estate in Florida to plea for a strategy that could include improved trade deals with foreign countries.Republicans were anxious as they heard the complaints of constituents worried about retirement savings. Some spoke out or considered legislation to curb Trump’s tariffs power. Senator Ted Cruz, a staunch Trump supporter, warned: “Tariffs are a tax on consumers, and I’m not a fan of jacking up taxes on American consumers.”It was a notable break from a party long criticised for a sycophantic, cultish devotion to Trump on all other issues. James Bennet, a columnist for the Economist magazine, told the Guardian’s Politics Weekly America podcast: “There are limits to how far Donald Trump can go and it is conceivable that Republicans could rise up against him.skip past newsletter promotionafter newsletter promotion“They haven’t been willing to do it as Donald Trump has embarked on this campaign of retribution, using the justice department to punish his foes. They haven’t been willing to do it over speech issues or the deportation of completely innocent people to a prison in El Salvador. But these tariffs were a step too far for them and that’s a signal that there is the possibility of Republican resistance at some point to this administration, which is the only thing that can really restrain it.”The mounting pressure from Republicans, business leaders and financial markets stoked fears of a recession that could even tip into a depression. Finally, Trump yielded and, on Wednesday, announced a 90-day pause for most countries while inviting them to negotiate bilateral trade deals.Antjuan Seawright, a Democratic strategist, said: “He saw the pressure from not only the American people but he saw people from within his own ecosystem screaming and yelling about how bad this was. Donald Trump has a history of caving because he is a paper tiger leader in many ways and this was just further proof of that. He wants to play hardball but with a soft bat.”White House aides argued otherwise, deploying the Trump playbook learned from his lawyer Roy Cohn: always claim victory and never admit defeat. Stephen Miller, White House deputy chief of staff, tweeted: “You have been watching the greatest economic master strategy from an American president in history.”But the president himself admitted that he had been monitoring the bond market and people were “getting a little queasy” as bond prices had fallen and interest rates increased. He said: “People were jumping a little bit out of line. They were getting yippy.”Even Trump, whose second term has been characterised by audacity, impunity and brazen lies, had reached the capacity of his reality distortion field and its amplification by rightwing media. The cold facts of the market were not to be denied.Kurt Bardella, a strategic communications adviser, said: “We’re seeing now, for the first time in Trump 2, the limitations of propaganda, of drinking your own Kool-Aid. There are economic realities, market realities that are larger than the lie that they tell themselves and the American people over and over again. Their attempt to try to sell that lie to the world clearly did not work.“He can go out there all day long till he’s blue in the face and say to friendly media and his Maga puppets [that] we’re being ripped off and this will lead to the greatest economic boom we’ve ever seen – but no one else is believing it. The private sector that he has propped himself up on for so long completely rejected all of this.”Bardella, a former congressional aide, added: “For all the ‘Let’s run the government like a business’ crowd, if any business ran themselves this way there would be a vote of no confidence and that CEO would be ousted that very day for deliberately tanking that company’s own stock.”After an initial surge, the markets dipped again. While the pause has offered a temporary reprieve, a 10% blanket duty on almost all US imports remains in effect. Karoline Leavitt, the White House press secretary, claimed on Friday that more than 75 countries have contacted the Trump administration with a view to addressing trade issues. “The phones have been ringing off the hook to make deals,” she said.But it remains uncertain whether the US will be able to secure significant concessions from other countries within 90 days. The mercurial nature of Trump’s decision-making on the on-again, off-again levies could add to the whiplash while eroding faith in the US and the reliability of the dollar.And the trade war with China continues to escalate, posing a significant threat to the global economy. Trump raised tariffs on China to 145%, prompting retaliation. US consumers are likely to feel the pain from price hikes on clothing and other products. China also threatened further non-tariff measures, such as blacklisting US companies and restricting exports of rare earth minerals.Larry Sabato, director of the Center for Politics at the University of Virginia, said: “It’s not over at all. The worst part is probably ahead because of China. Is he going to work out a deal with all these other countries? Get real. He has scrambled everything and America is no longer trusted in any sphere now – defence, international relations, economics. It’s sad.” More

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      Price hike on Shein? How Trump tariffs could shift the US’s love of fast fashion

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      After a chaotic week of flip-flopping tariff policies, cheap clothes from China are nearly certain to face a steep price hike soon – prompting concern among fast fashion retailers and potentially pushing consumers to look for other alternatives.As part of a package of global tariff policies announced on “liberation day” last week, Donald Trump signed an executive order that ended a duty-free exemption for low-priced goods to enter the US from China and Hong Kong. Known as the “de-minimis” rule, packages under $800 do not qualify for any taxes or tariffs on the goods and are inspected minimally at the border.Conceived as a means to allow Americans to bring back low-cost goods to the US from abroad, fast fashion giants including Shein and Temu have used the rule to send low-cost e-commerce purchases to the US with few expenses.Alon Rotem, the chief strategy officer for ThredUp, an online thrift store, welcomed the executive order.“With the proliferation of fast fashion, this is something we’ve really supported because it creates an unfair competitive advantage,” he said.Ending the de-minimis rule has been a target of bipartisan legislators in recent years as the value of goods entering the US under the rule soared from about $5.5bn in 2018 to $66bn in 2023, according to a congressional report. Nearly two-thirds of packages under the rule were shipped from China and Hong Kong, said a US International Trade Commission briefing.ThredUp has pushed for legislation to end the de-minimis rule through the American Circular Textiles, a trade group it helped found that advocates for strengthening domestic supply chains. Other members include the RealReal, Reformation and H&M.“This change was coming,” said Derek Lossing, the founder of Cirrus Global Advisors, a global logistics firm. “Maybe it’ll catch consumers by surprise, but it’s ultimately not catching the brands significantly by surprise.”Some companies have already begun diversifying their production outside of China. Others have evolved their business model to begin stocking more inventory in the US as well as moving some production here and then fulfilling orders domestically, Lossing added.Trump first announced the rule change in February, but then recanted in order to give border agents time to figure out how to address an influx of so many packages that will require more extensive inspection.It is currently expected to take effect 2 May. After that, the packages will be subject to a tariff rate of 30% or $25 an item, rising to $50 an item on 1 June. When China responded with retaliatory tariffs this week, Trump hit back and then tripled the rates for previously exempt packages to 90% or $75 an item, rising to $150 on 1 June.“Everyone’s just pulling up their pants and bracing for impact,” said Jason Wong, who works in product logistics for Temu in Hong Kong. “We know it’s going to be a mess.”Wong said one plan is to make more of a push into Europe as well as Australia, which has its own de-minimis rule that goods under $1,000 can enter the country without taxes or tariffs.“We know for a fact that the demand from the US and North America will significantly decrease,” he said.Shein and Temu did not respond to requests for comment about any shifts to their business model in response to the forthcoming rule change.Rotem, the ThredUp executive, said the rule change creates an opening for consumers to consider other options, including buying secondhand clothes. While he acknowledged that shoppers care about sustainability, he said it’s a secondary decision of consumers to price.“All of a sudden, if ultra fast fashion is now 30% or so more expensive, it really does make the value proposition that much more compelling for resale,” he said.skip past newsletter promotionafter newsletter promotionSome retail experts cautioned that the rule change may not deter consumers from options like Shein or Temu, because many of their items are so inexpensive to begin with.“Americans’ love affair with cheap goods is not over,” said Jason Goldberd, chief commerce strategy officer at Publicis Groupe, a global communications firm. “Even with the tariffs, the products still may be attractively priced.”Rotem said he saw promise in the shift: “We’re never going to get this thing perfect, but the progress with public policy to encourage resale is something that we’re going to support.”While the de-minimis rule change remains intact for now, anxiety and confusion is also high amid a whiplash in policies and wild market swings. On Wednesday, Trump ordered a 90-day freeze on tariffs, though kept a 10% flat rate tariff intact and then raised tariff rates for China.“Based on the lack of respect that China has shown to the World’s Markets, I am hereby raising the Tariff charged to China by the United States of America to 125%, effective immediately,” Trump wrote.On Friday, China responded by raising its tariff rate to 125% as well. An official said it would not raise the tariff rate any further than that.Wong, who works in Temu logistics, said that there have been so many changes to the policies, that partly the move will be to simply keep watching for now.“We don’t know how long this de-minimis thing is going to last,” he said, adding that backlash from consumers could lead to yet another policy shift.Goldberg echoed that sentiment, calling it “a dynamic situation”.“It may be different tomorrow,” he said. More

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      Trump, Lutnick and the Shark: key players in the US-Australia tariff tussle

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      Australia, like countries all over the world, now faces the invidious task of negotiating a way around the US’s new tariff wall, finding a way into the good graces of an administration that has proven itself capricious, especially with allies.The 10% tariff rate imposed on all Australian imports has not been paused and Australia’s negotiating position is complicated by a federal election: the government is in caretaker mode, and those seeking to “make a deal” may not have that responsibility next month.But beyond Australia’s own uncertainty, in dealing with the US there is the question of with whom to negotiate.Trade officials and diplomats agree Australia needs to bring discipline and unity to negotiations with a US administration that is its opposite.Multiple sources on both sides of the Pacific say the president is most swayed by the “last voice in the room”, underscoring the imperative for Australia to present a consistent message to the key figures who might have the president’s ear.

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      If it needed further demonstration, the week has showcased the unvarnished reality of an erratic global superpower. In an administration so unpredictable, where does the first phone call go and who has the final say?Key players in the US tariff regimeDonald TrumpPresident of the United StatesView image in fullscreenThe extraordinary “liberation day” announcement was just the beginning: a comprehensive global tariff regime (with some notable exceptions) triggered a stock market crash, followed by the announcement of a 90-day pause on (almost) all tariffs, which saw the stock market soaring and then sinking again, followed by an escalation with China.China has been hit with an increased tariff of 145%, while other tariffs will be “paused” – reduced to the 10% “baseline” rate imposed on Australia, the UK and others.Despite Australia having a free-trade agreement (ratified in 2005) and running a trade deficit with the US (a surplus from the American position), Trump’s position is Australia deserves to be hit with tariffs because of trade barriers he regards as protectionist.“Australia bans – and they’re wonderful people and wonderful everything – but they ban American beef. And, you know, I don’t blame them, but we’re doing the same thing right now, starting at midnight tonight,” he said on 3 April.Despite extraordinary financial tumult in the days since, Trump told a fundraising dinner this week the tariffs were working as a negotiating tool to bend other countries to his will. He said in the wake of the tariff announcement – but before they’d come into effect and crashed the stock market – that he’d been flooded with entreaties from foreign leaders.“These countries are calling me up, kissing my ass, [saying] ‘Make a deal, please, please, sir, make a deal, I’ll do anything, I’ll do anything, sir.’”Howard LutnickUS secretary of commerceView image in fullscreenThe famously combative Lutnick (the New Republic ran a piece this week headlined Everybody Hates Howard Lutnick), has been a key spear-carrier for Trump’s tariff regime, though his own views on their effectiveness are said to be “more nuanced” than his regular television appearances would suggest.Lutnick has singled out Australia for criticism over its trading relationship with the US.“Our farmers are blocked from selling almost anywhere. Europe won’t let us sell beef, Australia won’t let us sell beef,” Lutnick told a television interview. He dismissed Australian arguments the beef restriction was made for biosecurity reasons.“This is nonsense. This is all nonsense. What happens is they block our markets.”Lutnick told Fox News he was in the room week when Trump offered an olive branch of potential “bespoke” negotiations – country by country – to dismantle the tariff walls.“They started calling and making real offers, finally, finally really digging in and understanding how they treat the US unfairly and really offering us a clear path to where we could do really good deals with these countries.”Trump has put a 90-day pause on the imposition of tariffs above 10%, except on China. Beijing’s refusal to countenance negotiation, Lutnick said, meant it was treated with the opposite to a pause on tariffs: further tariff hikes – to 145% – a rate so high it is, in practice, effectively a trade embargo.“Donald Trump is the best negotiator that there is.”Peter NavarroDirector of the office of trade and manufacturing policyView image in fullscreenThe man who went to jail rather than give evidence to Congress about the January 6 insurrection is also a fierce advocate for the president’s tariff regime and an equally vociferous critic of Australia.He singled out aluminium imports from Australia as being exploitative.“The era of unchecked imports undermining American industry is over,” he wrote in USA Today. “The United States will no longer be a dumping ground for heavily subsidised and unfairly traded aluminum.”Navarro compared Australia to “strategic competitors” China and Russia.“Nations considered US allies also have been a big part of the problem. Consider Australia. Its heavily subsidised smelters operate below cost, giving them an unfair dumping advantage, while Australia’s close ties to China further distort global aluminum trade.”Navarro has argued Trump’s tariff regime would end the unfair exploitation of the US.“Australia is just killing our aluminum market,” he told CNN. “President Trump says, ‘No, no we’re not doing that any more.’”He accused Australia of “flooding” the US market, “killing” it and leaving the American domestic industry “on its back”.In 2024 Australian aluminium accounted for less than 2% of US aluminium imports.Navarro has previously quoted a fictional character, Ron Vara – an anagram of his own surname – as a source of economic wisdom. Elon Musk this week said Navarro was “dumber than a sack of bricks”.Jamieson GreerUS trade representativeView image in fullscreenHis office produces an annual barriers to trade report, which for 2025 singled out Australian biosecurity laws, the pharmaceutical benefits scheme and social media regulation as unfair Australian trade practices.Greer has been, along with Lutnick and Navarro, a spear-carrier for the tariff regime.Under questioning before the Senate finance committee, Greer said that, despite a free-trade agreement, Australia harmed US through non-tariff trade barriers.“We’re addressing the $1.2tn deficit – the largest in human history – that President [Joe] Biden left us with. We should be running up the score against Australia.“Despite the agreement, they ban our beef, they ban our pork. They’re getting ready to impose measures on our digital companies.”Greer also told the committee: “Australia has the lowest rate available under the new program.”This is not correct.Russia, Belarus, North Korea and Cuba were all exempted from the tariff regime.Administration insistence that Russia was exempted because it does no “meaningful trade” with the US are also not correct.According to statistics from Greer’s own office, Russia did $3.5bn worth of trade in 2024.Mark WarnerSenator for VirginiaView image in fullscreenThe Democratic senator was the man questioning Greer in the Senate finance committee.“On Australia, we have a trade surplus with Australia, we have a free-trade agreement, they are an incredibly important national security partner – why were they whacked with a tariff?”When Greer responded that Australia imposed biosecurity bans on some US meats and plans to regulate American tech giants, Warner was livid in riposte.“Sir, you’re a much smarter person than that answer: the idea that we are going to whack friend and foe alike, and particularly friends with this level, is both, I think, insulting the Australians, undermines our national security and, frankly, makes us not a good partner going forward.”Joe CourtneyCo-chair of the Congressional Friends of Australia CaucusView image in fullscreenA longtime advocate for Australia and its alliance with the US (rewarded with an Order of Australia for his services, no less), Courtney has described the tariffs imposed on Australia as an “insult”.“Australia is a key strategic ally for our country. They are positioned in the Indo-Pacific at a place where, again, tensions are sky high,” Courtney said.“Instead, what we’re seeing is a completely needless, almost insult to the people of Australia by raising tariffs on Australian products coming into this country.”Greg NormanAustralian former golferView image in fullscreenThe two-time major winner, who dined with Anthony Albanese on “liberation day” eve, has said he is willing to once again act as a diplomatic conduit between Australia and Trump personally. The US president, a lover of golf, has played regular rounds with the former world No 1.In 2016 Norman reportedly passed on Trump’s personal phone number to the then Australian prime minister, Malcolm Turnbull, after Trump unexpectedly won the US presidential election but couldn’t be contacted by the Australian government.“If I can give one tiny bit of help that can help going forward between our two nations, I would do it,” he said last month. “I’ve done it in the past; I would do it again.”Norman said Trump was aware of the significance of the US-Australia relationship.“He understands the extremely tight connection between Australia and the US, [which] I call big brother-little brother, that’s how I worded it with him. And I said the importance of that has been decades and decades old, and it’s not going to go anywhere.” More