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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

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      Trump administration to exempt smartphones and computers from tariffs

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      Donald Trump’s presidential administration has exempted smartphones and computers from the 125% levies imposed on imports from China as well as other reciprocal tariffs, which experts had cautioned might cause electronic consumer prices to dramatically spike in the US.The announcement was made late on Friday in a US Customs and Border Patrol (CBP) notice that said the devices would be excluded from the 10% global tariff that Trump recently imposed on most countries, along with the much heftier import tax on China.The CBP’s notice follows concerns from tech companies that the price of electronics for US consumers might surge with many of them manufactured in China. The notice also contained exemptions for additional electronics and components, such as memory cards, solar cells and semiconductors.The exclusions were applied retroactively to the products under the reciprocal tariffs beginning at 12.01am ET on 5 April, according to the notice.“Importers may request a refund by filing a post summary correction for unliquidated entries, or by filing a protest for entries that have liquidated but where the liquidation is not final because the protest period has not expired,” the CBP said.On Saturday, Trump released a statement of “clarification of exceptions” pertaining to the previous evening’s announcement. Speaking to CNBC, Dan Ives, the global head of technology research at the Los Angeles-based financial services firm Wedbush Securities, said on Saturday: “This is the dream scenario for tech investors … Smartphones, chips being excluded is a game-changer scenario when it comes to China tariffs.”Ives added: “I think ultimately big tech CEOs spoke loudly, and the White House had to understand and listen to the situation that this would have been Armageddon for big tech if it were implemented.”Similarly, Paul Ashworth, Capital Economics’ chief north America economist, said that the tariff exceptions “represent a partial de-escalation of president Trump’s trade war with China”.“There were even bigger winners in Asia, however, since the exemptions apply to all countries – not only China. At a stroke, 64% of US imports from Taiwan are now exempt from the 10% reciprocal tariff, 44% from Malaysia, and almost 30% from both Vietnam and Thailand. Ten to 12% of imports from India, Korea and Mexico will also now be exempt,” Ashworth added.“These exemptions will presumably not be the last either, with the success of Apple’s Tim Cook in getting its smartphones exempted likely to boost the lobbying by firms in other sectors.”Since Trump announced his tariffs, Apple was among the hardest hit tech companies – as 90% of its iPhones are reportedly assembled in China.Invoking imagery associated with the strongest classification for hurricanes, Ives had previously described the Chinese tariffs as a “category 5 price storm for the US consumer”. He added in a note to investors: “The reality is it would take three years and $30bn in our estimation to move even 10% of its supply chain from Asia to the US with major disruption in the process … For US consumers, the reality of a $1,000 iPhone being one of the best made consumer products on the planet would disappear.”According to analysts at the investment bank UBS, costs of iPhones would rise exponentially under Trump’s Chinese tariffs. The price of an iPhone 16 Pro Max (with 256GB of storage) could rise by 79% from $1,199 (£915) to about $2,150 (£1,600), the Guardian reported earlier.In attempts to mitigate the blow of Trump’s tariffs, Apple reportedly chartered cargo flights to transport iPhones from its Indian factories, with Reuters reporting the company having flown 600 tons of iPhones – or approximately 1.5m devices – to the US since March.Meanwhile, China’s Semiconductor Industry Association (CSIA) announced that the country’s “retaliatory” tariffs on US imports were limited to chips made in the US. Chips manufactured in Taiwan and South Korea remain unaffected.According to the CSIA, the “country of origin” for integrated circuits would be determined by the location of the manufacturing facility, not the final packaging or design location, CGTN reportsed. In other words, US chipmakers that outsource manufacturing to other parts of the world are exempt from China’s “retaliatory” tariffs.The latest announcement from the CSIA came as China slapped 125% tariffs on US products on Friday as part of the latest trade-war escalation between the two trade giants. More

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      ‘It’s going to be messy’: Americans on how Trump’s tariffs are shaping their spending

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      A few weeks ago, Dane began stocking up on “paper products”, “cases of paper towels, toilet paper”, “piddle-pads” for their shih-tzu, and his wife upgraded from an iPhone 8 to 14.The 73-year-old in South Carolina said the purchases – which were made to get ahead of Donald Trump’s trade policies – reminded him of the early weeks of the Covid pandemic, when he scrambled to buy masks, gloves and toilet paper.“It’s scary,” Dane said. “Prices are going to go up because of tariffs … It’s going to be messy.”While campaigning last year, Trump constantly touted his love of tariffs. But it was not until his so-called “liberation day” on 2 April – where the president announced sweeping duties on incoming goods, punishing competitors, allies and small and developing countries alike – that he spooked global financial markets and provoked fears of spiralling inflation and stagnant growth.Amid a US government bond sell-off, the president paused his most eye-watering tariffs for 90 days, apart from China, whose goods are set to be hit with a 145% levy.Hundreds of Americans got in touch with the Guardian to share how the uncertainty is affecting their consumption habits.Dane, who is retired, worked as an entrepreneur with his wife most of his career before later becoming an English teacher. He said he was a Republican in the 1980s but is fearful about how the US is “not going the right way” under Trump, and is unhappy with his “dystopian” policies towards global allies, the economy, education, scientific research and more.View image in fullscreenCurrently, Dane is on a trip to Paris and plans to bring home consumer goods potentially hit by 10% tariffs on European Union imports.“We’ll probably be getting tea, bringing back some cheese, some butter,” he said. “I would love to bring back eggs but that would be a disaster. I’d have scrambled eggs in my suitcase.”Amid tariff uncertainty, Heather, a 61-year-old college professor in Texas, said she and her husband can mostly weather food cost fluctuations, but brought forward the purchase of a new car “inanticipation of price hikes”.She said they owned a 14-year-old Mini Cooper, which ran on gas, that they planned to replace with a hybrid vehicle at some point. They decided to replace their car now to avoid potential inflation – and reduce expenditure on gas.“The economic instability of the Trump administration certainly gives one pause,” she said. “It’s just so much instability, chaos and [the] unknown.”It’s a similar story for Stefanie, a 56-year-old educator and former tech worker in Nevada, who bought a Toyota Tacoma to replace her old Jeep as well as converting some investments into cash.Stefanie began strategizing about being more resilient to tariffs as soon as Trump was elected.“The one thing I learned in the first administration is to believe him: he says bizarre things, and then he does bizarre things,” she said.She’s cutting back on subscriptions and future travel plans, while stockpiling kitchen staples such as rice, cooking oils, vinegar and flour and replacing worn-out clothes including shoes and jeans, “before inflation hits”.“The supply chain is so globalized that tariffs really hit everything,” Stefanie said.But for Ishaan*, a 51-year-old engineer in Texas, the economic picture means he is abstaining from major purchases.“Everyone I know has started tightening their belts,” he said. “I am cutting out unnecessary expenses, cancelled my gym membership, focusing on savings.”The focus for Ishaan, who fears higher prices and an economic slowdown, is to build up his savings in cash. He feels “scared to invest in any stocks or bonds right now” amid market volatility.Likewise for Jonathan*, a 70-year-old in New Jersey, the financial fallout from Trump’s trade wars means he has been forced to rule out planned purchases and strip consumption back to the essentials.Jonathan said his individual retirement account (IRA) was initially “decimated” – although it ticked up slightly after Trump paused his tariffs on Wednesday. He said it was currently down about 15%.That means cancelling plans to redo the carpet in his house and replace two old televisions, Jonathan said. “In short, we’ll buy only necessities and pay bills until this stupidity ends.”Russ a 35-year-old physicist in New Mexico, said the Trump administration’s policies were “causing me to think about what kinds of spending behavior I could have done without this whole time”.He has an eight-year-old phone and nine-year-old MacBook computer that still work fine, which he will not be replacing. The prospect of runaway price rises for consumer electronics, often from China, have led him to reconsider: “Do I really need this, or do I just want this?“I see these things as being as much toys as necessities,” he said. “Maybe I’ll just go back to a dumbphone or something like that – I fantasize sometimes about not getting all these notifications all the time, like the phones we had back in 2005. But maybe that’s a Luddite fantasy.”Russ said that he was already boycotting Amazon and Target – companies that many feel have aligned themselves with Trump’s agenda such as rolling back their own DEI schemes. He’s trying to shop more at local, independent shops rather than “everything stores”, which he notes is more expensive and time consuming but ultimately worth it.“As an American citizen and registered voter, nobody really cares what you think until November of every other year, you feel kind of voiceless,” he said. “You think, well, if dollars are the only tools we have any more, then damn it, I’m going to cast those votes and allocate my spending accordingly.”View image in fullscreenLikewise, small business owner Christine* said the disruption could cause a wider re-evaluation of US consumer habits.Amid the uncertainty, Christine, 41, stocked up on supplies for her Miami acupuncture business for two years, and bought her son’s fifth birthday present – a bike – early for July. But she said she had already noticed less demand for her work.More broadly, the prospect of inflationary tariffs is accelerating Christine’s reconsideration of how much “stuff” she needs. She’s recently attended “these lovely parties” where friends bring unwanted clothes and they “switch it all around” rather than buying fast fashion.“I really resent being drafted into this mad trade war,” Christine said, “but if there is a silver lining, maybe it’s that at least some people like me will question their unsustainable capitalistic practices.”*Some names have been changed. More

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      ‘A new golden age’: how rightwing media stuck by Trump as global markets collapsed

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      While Donald Trump recently instituted and paused hefty tariffs, sparking a trade war and chaos in financial markets, most of the country’s conservative media either applauded the US president or critiqued the policy but not the person behind it, according to journalists and observers of conservative media.Meanwhile, economists, business leaders, Democrats and even some Republicans warned that the tariffs, which prompted the largest American stock market drop since the start of the Covid-19 pandemic, could cause a recession.“News is what impacts the greatest number of people,” like tariffs and “the evaporation of wealth and the ripple effect on not just the US economy, but the global economy”, said Howard Polskin, president of The Righting, a newsletter and website that monitors conservative media. “By any stretch of imagination, that should be a lead story.”But the chaos of last week posed a serious challenge to many aspects of rightwing US media, which often acts as a largely unquestioning cheerleader for Trump and his Maga movement. The story was sometimes played down, sometimes cheered but rarely seriously questioned – even amid warnings of price rises, recession and cratering investments, especially precious 401(k) retirement accounts.The most popular conservative news source in the United States is Fox News, which has a much larger audience than CNN and the leftwing MSNBC network. Its hosts, such as Sean Hannity and Jesse Watters, consistently praise Trump and bolster his inaccurate claims.But Fox News has faced new competition from Newsmax and One American News Network (OANN), networks that positioned themselves as even more reliable Trump supporters. The Wall Street Journal, which has the same owner as Fox News, features a right-leaning opinion section, but also has done lengthy investigations into Trump and Joe Biden and is a favorite among people in the financial sector.Rightwing commentators such as Tucker Carlson and Ben Shapiro also command a large audience through podcasts and social media.After Trump declared 2 April “liberation day” and announced that the country would on 5 April institute a 10% universal tariff on all imported goods and on 9 April start “reciprocal tariffs” on some of its largest trading partners, including a 34% tariff on imports from China and a 20% tariff on goods from the European Union, Hannity described it as “a day that will be remembered as a turning point and the start, I hope for every American, of a new golden age”.China retaliated with a 34% tariff. Global stock markets fell sharply; the Dow Jones industrial average declined more than 2,000 points over the next two days.Economists and leaders of financial institutions said that the tariffs increased the likelihood of a recession and inflation. Most Republican lawmakers stood behind the president; a minority, like Senators Ted Cruz and Rand Paul, expressed opposition and said the tariffs amounted to a tax increase for Americans.While Fox Business, a sibling network, had guests who criticized the tariffs, Fox News personalities told viewers nervous about their investments that everything would work out well. A Fox News spokesperson did not respond to the Guardian’s requests for an interview.“I don’t really care about my 401(k) today,” Jeanine Pirro said on 3 April on the show The Five. “We’ve got to have manufacturing in this country … and Donald Trump is the only one who could do it because he’s got the biggest consumer base in the world. He’s not afraid of anybody.”Despite the market upheaval, the Fox News commentators were “in too deep” to break with Trump, said Matt Gertz, a senior fellow at Media Matters for America, a leftwing advocacy group.“They have, for nearly a decade now, sold their audience on the sense that Donald Trump would be a good president,” Gertz said 7 April. “Now he is single-handedly causing a worldwide market collapse,” but “they can’t abandon him”.Other conservative news organizations opted to focus on other issues. At one point on 8 April, the only story on tariffs on the OANN frontpage concerned the former speaker of the US House of Representatives Nancy Pelosi and her comments on tariffs in 1996.The network did interview Arthur Laffer, a conservative economist who Trump awarded the Presidential Medal of Freedom. Laffer said that if Trump kept the tariffs, he didn’t see how the country could avoid a recession, but he still “could not think of one person on Earth that I would prefer more to be president”.On 9 April at Newsmax, the headline of their main story read, “Trump: Tariffs Bring in $2 Billion a Day.”The actual number this month was about $200m, Reuters reported.“A lot of times it feels more like propaganda,” Polskin said of the cable networks’ coverage. “I find it all extremely alarming, the stock market and that consumers of rightwing media could be misled so egregiously.”Newsmax did not respond to the Guardian’s request for an interview.There are exceptions in the conservative media sphere. The Journal has criticized Trump and his tariff policy.skip past newsletter promotionafter newsletter promotion“Trump Owns the Economy Now. He can try to blame the Fed, but the tariff blunder is his alone,” was the headline of a recent editorial.Their editorial pages have been “characterized through the years as sort of the bastion of conservatism”, said Rick Edmonds, media business analyst for the Poynter Institute. “They are not at all sympathetic to the tariff actions.”Shapiro, the rightwing pundit and a founder of the Daily Wire, devoted much of his podcasts after “liberation day” to scrutinizing the tariffs and questioned whether they could actually bring manufacturers back to the United States.But Shapiro reassured listeners that he supported the president.“What exactly is this designed to do?” Shapiro said of the tariffs during a 3 April episode of his podcast. “It is predicated on a bad idea of how international trade works. I’ve said this a thousand times: this is not coming from a place of I want Trump to fail.”Shapiro called for Trump to fire Peter Navarro, the White House trade adviser who reportedly shaped the tariffs strategy. But, of course, it was Trump who instituted them.“In general, the rightwing media, they are like Republican politicians. They don’t want to cross Trump,” Edmonds said.Still, Aaron Rupar, a journalist who tracks speeches and interviews Trump and his officials give to conservative media, thought their coverage of the tariffs was “a little more honest” than their coverage of events like the January 6 attack on the Capitol or the trials Trump faced when he was out of office.“With financial data, it’s a little harder to gaslight people,” he said.Ultimately, hours after the reciprocal tariffs took effect, Trump announced a 90-day pause on them, except for China, whose tariff he increased to 125%.“Many of you in the media clearly missed The Art of the Deal,” the White House press secretary, Karoline Leavitt, said afterwards, referring to Trump’s book. “You clearly failed to see what President Trump is doing here.”A day later, with stocks still down significantly from before “liberation day”, Ainsley Earhardt, a Fox News host, reiterated Leavitt’s point.“This is the art of the deal,” she said. “This shows how strong our president is.” More

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      Trump’s tariff mess raises the danger of a US default | Lloyd Green

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      “Trump backs down on tariffs, again. And it doesn’t look strategic,” a headline blared on Wednesday afternoon.At the end of trading, equities had recovered a portion of their losses. But plenty of damage had been done. Markets were thrown into turmoil, interest rates jumped and business activity took a hit. Beyond that, the possibility of a recession grew – and the possibility of a default by the US inched up to 6%, according to prediction markets.Meanwhile, Larry Summers, a treasury secretary under Bill Clinton, announced that a recession appeared imminent. “We are being treated by global financial markets like a problematic emerging market,” he posted on X. Also on Wednesday, the Federal Reserve Bank of Atlanta projected first-quarter growth to be negative 2.4%. By extension, tax receipts will probably have shrunk.Less money coming into the treasury’s coffers means that government could breach the debt ceiling sooner than already projected if Congress eventually fails to act. That is bad news for Donald Trump, the Republicans and the country.Before Trump transformed the economy into his personal yo-yo, the government stood poised to default on the nation’s $36tn debt sometime in between mid-July and early October, absent legislation. During the president’s walk on the economic wild side, the odds of a recession grew. Ditto the possibility of a default, a reality of which Trump is acutely aware.With Biden in the White House, Trump urged congressional Republicans to stymie efforts to lift the ceiling. “I say to the Republicans out there – congressmen, senators – if they don’t give you massive cuts, you’re going to have to do a default,” he announced. A default would also mean no social security checks for the US’s seniors.“And I don’t believe they’re going to do a default because I think the Democrats will absolutely cave, will absolutely cave because you don’t want to have that happen. But it’s better than what we’re doing right now because we’re spending money like drunken sailors.”In May 2023, the Biden administration brokered a compromise with the then House speaker, Kevin McCarthy, to increase the debt ceiling but limit spending. The deal came to cost McCarthy his gig as speaker.As president-elect, however, Trump began singing a very different tune. Suddenly debt didn’t matter. In a mid-December telephone interview, Trump urged Congress to scrap the ceiling permanently. “I would support that entirely,” he told NBC News. Apparently, what was sauce for the Democratic goose was not sauce for the Republican gander.“The Democrats have said they want to get rid of it. If they want to get rid of it, I would lead the charge.” Christmas came and went. Republican control of the Senate loomed with the new year.In late December, Trump went on the warpath, albeit to no avail. “The Democrats must be forced to take a vote on this treacherous issue NOW, during the Biden Administration, and not in June,” he thundered. “They should be blamed for this potential disaster, not the Republicans!”Nothing happened.Trump’s hopes for the debt ceiling now rest with the Republican-controlled Congress. Republican budget blueprints envision the ceiling being lifted through reconciliation, a process that bypasses the filibuster in the Senate and instead requires a simple majority vote in each chamber.Whether that happens anytime soon is an open question. Punters peg the chance of a pre-June increase of the debt ceiling at one-in-five. Congress loves procrastinating. Nothing focuses their attention like a crisis.Regardless, Trump’s tariff gambit leaves a pile of economic debris, including the market for US bonds. After his flip-flop on tariffs, Trump suggested that the sell-off in the bond market had forced his hand.skip past newsletter promotionafter newsletter promotion“The bond market is very tricky, I was watching it,” he told the press. “The bond market right now is beautiful. But yeah, I saw last night where people were getting a little queasy.”“Queasy” – more like panicked. Or terrified.Practically speaking, the bond rout means the US government will be forced to pay more to borrow – not an ideal situation while Trump and the GOP push for another round of tax cuts.Regardless, the president’s capitulation reinforced the observation of James Carville, Bill Clinton’s storied political adviser. “I used to think if there was reincarnation, I wanted to come back as the president or the pope or a .400 baseball hitter,” he began.“But now I want to come back as the bond market. You can intimidate everybody,” including Trump.For the moment, the US appears locked in a battle with China, one of the two largest holders of its debt. Don’t believe there is method to Trump’s madness.“We didn’t have access to lawyers … We wrote it up from our hearts, right?” Trump said of his Truth Social post announcing the pause. “It was written from the heart, and I think it was well written too.”Let that sink in. That’s no way to run an airline, let alone a country. On Thursday, markets gave back a chunk of their gains, the dollar sank and gold rose. More

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      ‘Completely out of touch’: golf and dinners for ‘king’ Trump as economy melts down

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      After lighting a fuse under global financial markets, Donald Trump stepped back – all the way to a Florida golf course. A week later, having just caved to pressure to ease his trade tariffs, the US president defended the retreat while hosting racing car champions at the White House.Trump had spent the time in between golfing, dining with donors and making insouciant declarations such as “this is a great time to get rich”, even as the US economy melted down.It was a jolting juxtaposition that prompted comparisons with the emperor Nero, who fiddled while Rome burned, or insane monarchs who lost touch with reality. It also provided a clear illustration of how Trump governs during his volatile and extreme second presidency: erratically, with little attention to convention, and often on the hoof from one public engagement to another surrounded by courtiers who never disagree with him.“He’s certainly living up to the caricature of being a mad king,” said Kurt Bardella, a Democratic strategist. “When you’re addressing a ballroom in a tuxedo, telling people to take the painful medicine, or on your umpteenth golf vacation while economic chaos is rippling throughout this country and others, at best you’re completely out of touch.“At worst, you’re a sociopathic narcissist who doesn’t give a crap about anyone suffering. Ultimately there will be a political price to pay for that.”Trump had swerved past April Fools’ Day to make 2 April his so-called “liberation day”. Against a backdrop of giant US flags in the White House Rose Garden, he announced sweeping tariffs – taxes on foreign imports – on dozens of countries, using a widely discredited formula to upend the decades-old order of global trade.Trump did not decide on the final plan until less than three hours ahead of his splashy event, according to the Washington Post newspaper, but found Vice-President JD Vance and other staff constantly deferential. The Post quoted a person close to his inner circle as saying: “He’s at the peak of just not giving a fuck any more. Bad news stories? Doesn’t give a fuck. He’s going to do what he’s going to do. He’s going to do what he promised to do on the campaign trail.”A day later, with markets suffering trillions of dollars in losses, Trump boarded Air Force One bound for Miami, Florida. He arrived at his Doral resort for a Saudi-funded LIV Golf event in a golf cart driven by his son Eric Trump.Trump woke up on Friday at Mar-a-Lago, his gilded private club in Palm Beach, Florida, and donned a red “Make America great again” cap and white polo shirt. His limousine glided down a street lined with palm streets and cheering fans before arriving at his golf club.He also spent the morning defending himself on his Truth Social media platform and vowing to stay the course. “TO THE MANY INVESTORS COMING INTO THE UNITED STATES AND INVESTING MASSIVE AMOUNTS OF MONEY, MY POLICIES WILL NEVER CHANGE,” he wrote.Trump remained in Florida during the dignified transfer of four US soldiers killed during a training exercise in Lithuania, sending Pete Hegseth, the defense secretary, to Dover air force base in Delaware to represent him. Instead the president attended a candlelit dinner for Maga Inc, an allied political organisation, reportedly charging $1m a plate.Maggie Haberman, a Trump biographer and New York Times reporter, commented on CNN: “I think long ago he stopped caring about certain optics, and he’s made very clear during this presidency, he’s going to do what he wants … He is not messaging this in a way that suggests that he understands what average people might be going through right now.”On Saturday, Trump played at another family golf course, in Jupiter, Florida, prompting an official White House announcement: “The president won his second round matchup of the senior club championship today in Jupiter, Fla., and advances to the championship round on Sunday.”When Sunday came the president played on even as his cabinet members scrambled to political TV shows and offered conflicting signals, with some insisting that his tariffs were set in stone and others suggesting that he remained open to negotiation.Trump returned to Washington and a growing chorus of dissent from allies, captains of industry and his own Republican loyalty, pleading with him to change course before a potential recession turned into a depression. Yet his first public event was a celebration of baseball’s World Series winners, the Los Angeles Dodgers, where he was presented with a “Trump 47” baseball shirt.On Tuesday, in bow tie and tuxedo, Trump told a fundraising dinner in Washington: “I know what the hell I’m doing.” He claimed that the tariffs were forcing world leaders to negotiate with him, boasting: “I’m telling you, these countries are calling us up, kissing my ass. They are. They are dying to make a deal.”But the following day, Trump blinked. He posted on Truth Social that, while escalating tariffs on China, he would pause others for 90 days to allow space for negotiation. His bubble of wealth and power had finally been punctured.Trump has often proved impervious to the kind of scandals or gaffes that would damage another politician, but his casual attitude even as the markets were on fire suggested a man uniquely detached from the anxieties of ordinary people, including his own voters.Larry Sabato, the director of the Center for Politics at the University of Virginia, said: “Let them eat cake: Marie Antoinette kind of fits. He won his own golf tournament at his own club. How about that? Bill Clinton also cheated at golf a lot and people would let him win because he was president. It’s just the way they are. Rules don’t apply.”This is not the first time that Trump, accused by critics of demanding absolute loyalty from courtiers, pursuing vengeance against perceived enemies and displaying scorn for his subjects, has been likened to a monarch.Speaking at the Politics and Prose bookshop in Washington last weekend, Maureen Dowd, a New York Times columnist and author of the book Notorious, compared the president to William Shakespeare’s Richard III.“Richard III comes up to the edge of the stage and wraps the audience into the bad thing he’s about to do,” Dowd told the Guardian during a question and answer session. “He tells them and he uses humour so that he’s supposed to be the villain, but the humour kind of counters it so you don’t think of him as badly.“Trump does the same thing … He has this kind of wacky side so then when he does the very authoritarian stuff you get deflected by the crazy side he has. I think the SNL [Saturday Night Live] mimic captures this where he’s sort of being funny, so then when he turns authoritarian, you’re thinking: wait, is he really doing what I think he’s doing?” More