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      California launches legal challenge against Trump’s ‘illegal’ tariffs

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      California is preparing to ask a court to block Donald Trump’s “illegal” tariffs, accusing the president of overstepping his authority and causing “immediate and irreparable harm” to the world’s fifth-largest economy.The lawsuit, to be filed in federal court on Wednesday by California’s governor, Gavin Newsom, and attorney general, Rob Bonta, is the most significant challenge yet to Trump’s flurry of on-again-off-again tariffs.In the complaint, California officials argue that the US constitution explicitly grants Congress the power to impose tariffs and that the president’s invocation of emergency powers to unilaterally escalate a global trade war, which has rattled stock markets and raised fears of recession, is unlawful.“No state is poised to lose more than the state of California,” Newsom said, formally unveiling the lawsuit during a press conference at an almond farm in the Central valley on Wednesday. “It’s a serious and sober moment, and I’d be … lying to you if I said it can be quickly undone.”Invoking a statute known as the International Emergency Economic Powers Act of 1977 (IEEPA), Trump has issued a series of declarations imposing, reversing, delaying, restarting and modifying tariffs on US trading partners.The complaint argues that the law does not give the US president the authority to impose tariffs without the consent of Congress. It asks the court to declare Trump’s tariff orders “unlawful and void” and to order the Department of Homeland Security and Customs and Border Protection to stop enforcing them.“The president is yet again acting as if he’s above the law. He isn’t,” Bonta said at the press conference on Wednesday, noting that it was the state’s 14th lawsuit against the Trump administration in less than 14 weeks. “Bottom line: Trump doesn’t have the singular power to radically upend the country’s economic landscape. That’s not how our democracy works.”Trump has said tariffs are necessary to ensure “fair trade”, protect American workers and turn the US into an “industrial powerhouse”.In a statement responding to the lawsuit, White House spokesman Kush Desai said the administration was “committed” to the president’s trade strategy. “Instead of focusing on California’s rampant crime, homelessness and unaffordability, Gavin Newsom is spending his time trying to block President Trump’s historic efforts to finally address the national emergency of our country’s persistent goods trade deficits,” he said.Newsom said his office had informed the White House in advance that it was bringing this lawsuit, but that the governor has not spoken to the president directly about it.Earlier this month, on what he called “liberation day”, the president imposed a sweeping 10% tariff on nearly all imported goods and higher tariffs for a host of countries, most of which he later paused for 90 days.A 25% tariff on imports from Canada and Mexico, the US’s largest trading partners, remains in effect, while Trump’s actions have provoked a trade war with China, its third-largest trading partner, subject to US tariffs of 145%.California, the US’s largest importer and second-largest exporter with an economy larger than most countries, relies heavily on trade with Mexico, Canada and China, the state’s top trading partners. The complaint says the economic consequences of Trump’s tariffs on the state will be “significant”.skip past newsletter promotionafter newsletter promotionCalifornia is the first US state to bring a lawsuit against the Trump administration’s tariff policies. Earlier this week, a legal advocacy group filed a similar lawsuit on behalf of US businesses that import goods from countries targeted by the levies, asking the US court of international trade to block Trump’s tariffs.Newsom said said the economic consequences of the tariffs would be reflected in a revised budget proposal he will submit next month. “Across the spectrum, the impacts are off the charts.”“Regardless of all the scientific and engineering advances, farming is still hard work, and the weather makes every year a gamble,” said Christine Gemperle, who hosted the governor and attorney at her almond farm. “The last thing we need is more uncertainty and not knowing whether we can ride this one out.”California is the nation’s top agricultural exporter, shipping nuts, tomatoes, wine and rice around the world. California’s agricultural exports totalled nearly $24bn in 2022.After Trump’s announcement of across-the-board levies, Newsom said his administration would pursue new trade deals with international partners to exempt California from retaliatory tariffs. It also launched a campaign to encourage Canadian tourism to California, which has fallen dramatically in response to the Trump administration’s policies. Newsom called the effort a “sign of the times”.“We talk about own goals. We talk about stupidity,” he said of Trump’s pursuit of a global trade war. “This needs to be updated in the next Wikipedia or the next encyclopedia as a poster child for that.” More

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      ‘Shock to the system’: farmers hit by Trump’s tariffs and cuts say they need another bailout

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      Farmers across the United States say they could face financial ruin – unless there is a huge taxpayer-funded bailout to compensate for losses generated by Donald Trump’s sweeping cuts and chaotic tariffs.Small- and medium-sized farms were already struggling amid worsening climate shocks and volatile commodities markets, on top of being squeezed by large corporations that dominate the supply chain.In recent weeks, farmers in Texas and across the midwest have suffered millions of dollars of crop losses due to unprecedented heavy rainfall and flooding.The climate crisis-fueled extreme weather is compounded by the US president’s looming trade war and the administration targeting popular federal programs and staff, leaving farmers reeling and resigned to needing another bailout.“There’s a lot of uncertainty around and I hate to be used as a bargaining chip. I am definitely worried,” said Travis Johnson, who lost more than 1,000 acres of cotton, sorghum and corn after a year’s rain fell within 48 hours in the Rio Grande Valley (RGV) in southern Texas last month, turning parched fields into lakes.RGV farmers sell sorghum, wheat, corn and vegetables to Mexico among other crops, while buying fertilizer and equipment – and relying on Mexican farmhands for cheap labor. Mexico is the US’s largest trading partner, while China is the main buyer of American sorghum and cotton. All US products destined for China face a 125% tax thanks to Trump’s tariff war, and could cut farmers off from core markets.View image in fullscreen“I can see how some tariffs might help us compete with Mexico but are we really getting targeted by every other country or are we on the wrong side of this? We’ve already had two years of absolute disaster with falling prices and weather patterns … no farmer wants this but without a bailout this could be devastating and a lot more people could go under,” Johnson said.Rural counties rallied behind Trump in 2024, giving him a majority in all but 11 of the 444 farming-dependent counties last year, averaging 78% support, according to analysis by Investigate Midwest.Trump’s vote share rose among farming communities, despite his last trade war which required a $23bn taxpayer bailout for farmers in 2018-19.Yet anxiety is mounting among the agricultural base.First came widespread cuts to oversubscribed and chronically underfunded federal climate and conservation schemes designed to reduce costs and greenhouse gases, and improve yields and environmental health.Trump is also shuttering local food programs which provide farmers with stable domestic markets like public school districts and food banks, helping make farms more resilient to global economic shocks. The USAID, which purchased about $2bn every year in agricultural products particularly wheat, sorghum and lentils for humanitarian aid programs, has been dismantled.The loss in federal programs alone would have been tough to cope with, but then came the trade chaos. Trump’s tariff announcements began when most farmers already had spring crops in the ground – or at the very least had prepared the land and purchased inputs such as seeds and pesticides, making it impossible to switch to crops that could potentially find a market domestically.View image in fullscreenConsensus is growing among experts that the turmoil represents an opportunity for rival agriculture economies – and disaster for US farmers.“It’s all happening so fast and in the middle of the growing season, it’s a shock to the system that’s going to be tough for farmers, especially those growing commodities for export,” said Ben Lilliston, director of rural strategies and climate change at the Institute for Agriculture and Trade Policy (IATP). “Tariffs are not magical, they need to be used strategically as part of wider reforms to the domestic economic agenda.”“The volatility of the tariff policy decisions, with new tariffs frequently being announced, paused and placed will take a toll on the American agricultural industry,” writes economist Betty Resnick in an article for Farm Bureau, a right-leaning lobby group. “Without direct support from USDA or a farm bill with an updated safety net, farmers will almost certainly bear the brunt of these tariffs.”Ben Murray, senior researcher with the consumer advocacy group Food and Water Watch, said: “Without a bailout, we can only imagine how bad this will be for farmers and what an opportunity for Brazil – and this is all being done for a tax cut for the wealthy.”For decades now, US farmers have been heavily incentivized through the Farm Bill to grow commodity crops destined for export such as wheat, corn, soy, sorghum, rice and cotton, rather than produce for domestic consumption. The price of commodities is tied to the global market, even if sold domestically. Meanwhile US imports of fruits and vegetables mostly from Latin America have risen, now accounting for more than 50% of consumption, according to USDA data.This globalized agricultural system favors large and corporate-owned operations, as smaller farms struggle more with boom and bust prices, and access to government subsidies and other credit. The number of farms continues to decline, while the average size continues to rise. Market consolidation and corporate profits tend to surge in the agriculture industry after every economic shock including the Covid pandemic, Trump’s last trade war and the banking crisis.Biden implemented a range of modest, imperfect policies to try to ease the pain for smaller-scale farmers including a greater focus on anti-trust, local and regional food systems, and climate resilience – all of which are under attack by the Trump administration.The vast majority of a $19.5bn funding package by the Biden administration for evidence-based conservation practices that improve soil health, air quality and reduce the use of costly fertilizers, pesticides and water will not be honored. The 10-year fund allocated through the Inflation Reduction Act was an addendum to money ring-fenced in the Farm Bill for four oversubscribed programs, after years of pressure from farmers to expand access to the initiatives.Two Biden-era healthy eating schemes worth a combined $1bn to local farmers have been canceled: the Local Food Purchase Assistance (LFPA) program matching producers to food banks, and the Local Food for Schools Cooperative Agreement Program which helped public schools add healthy, locally grown produce on to lunch menus. (The USDA recently agreed to unfreeze funding for existing contracts.)View image in fullscreen“My farm will survive because we’ve been working with school districts for 20 years, but for others in our coalition the funding cliff is very real,” said Anna Knight, who owns an 80-acre citrus farm in southern California.Piling on further misery are mass layoffs within the USDA that were seemingly orchestrated by the billionaire Trump donor Elon Musk.More than 10% of USDA staff have already reportedly agreed to voluntary buyouts, with more expected in coming weeks. This is in addition to several thousand probationary employees who were laid off last month – a move which disproportionately hit local offices beefed up under the Biden administration, and is being challenged in the courts.USDA field offices play a crucial role in rural communities, the place where farmers go for tailor-made technical help from agencies including the National Resource Conservation Service (NRCS) and the Farm Service Agency (FSA) on the latest pest control and planting practices, conservation programs, loans and disaster assistance programs.“It makes no sense taking billions of dollars off the table for programs that improve long-term farm viability and resilience – and which farmers have been lining up for years for – and then spend billions bringing back farmers from financial collapse,” said Jesse Womack, policy expert at the National Sustainable Agricultural Coalition. “It’s looking really bleak with a lot of pain ahead for farmers.”A coalition of environmental and agricultural groups is suing the USDA after it purged an array of climate-related online resources including information on the NRCS website helping farmers access federal grants for conservation practices, and technical guidance on cutting emissions and strengthening resilience to extreme weather like floods and drought.Even if there is a bailout, getting the money to farmers in time to avoid bankruptcy will be much more complicated this time, according to Lilliston from IATP.“Another bailout seems inevitable but there are serious questions about how quickly it could be implemented with such a dysfunctional Congress, local USDA offices shuttered and fewer staff. It’s a very messy situation and farmers are already experiencing harm.”And in the medium and long term: “The US reputation has taken a huge hit. We can no longer be considered a reliable trading partner which is terrible for farmers,” added Lilliston.Even before the current mayhem, almost two-thirds of US rural bankers surveyed in March expected farmer income to decline in 2025, with farm equipment sales dropping for the 19th straight month, according to the latest Rural Mainstreet Economy survey by Creighton University. Grain and cotton prices have plummeted since 2022.View image in fullscreen“We were already in a precarious situation but now, unless there’s a bailout or this trade war is resolved by harvest time, it will be disastrous and a critical mass of farmers could go out of business,” said Adam Chappell, 46, a commodities farmer growing corn, cotton, soybean and rice in Arkansas, where dozens of local USDA staff have reportedly been furloughed or fired in recent weeks.Chappell’s town Cotton Plant was hit with 13in of rain in early April, causing crop losses for many farmers. Chappell’s fields survived the rain but he spent a nervous few weeks after the USDA froze all conservation funds, unsure whether the government would reimburse him, as agreed, for an upfront investment in cover crops and a compost operation. Eventually, after a backlash, the administration backtracked and agreed to honor existing contracts.“The weather is getting stranger and more challenging to deal with every year, while big monopoly corporations are allowed to manipulate the system and squeeze us at every part of the supply chain. Farmers like me lean heavily on the NRCS conservation programs to improve soil health and reduce input costs,” said Chappell. “The tariffs are like adding salt on the wound.”Despite last week’s partial U-turn, Trump’s ongoing and increasingly chaotic trade war risks causing irreparable harm to international markets for farmers, especially but not exclusively China, as well as pushing up the cost of agricultural imports such as pesticides, fertilizer and machinery.China is the US’s third biggest agricultural export market, worth $24.7bn in 2024, down 15% from 2023, as soybean, corn and sorghum sales fell amid rising competition from South America, according to USDA data. China’s top imports from the US are oilseeds and grains. US exports to China supported almost a million US jobs in 2022, according to the US-China Business Council, mostly around agriculture and livestock production.As of Friday, at least 15 agricultural department programs worth billions of dollars to American farmers and rural communities remain frozen, according to Politico, more than two months after they were halted for review to ensure compliance with Trump’s priorities opposing diversity, equity and inclusion (DEI) efforts as well as his crackdown on climate change initiatives.This includes the Biden-era partnerships for climate-smart commodities (PCSC) program – a five-year $3.2bn real-life study into the effectiveness of conservation practices such as cover cropping and reduced tillage for commodity farms.“PSCS was about increasing our evidence base on climate benefits that also help commodity farmers improve soil health, air and water quality – and their bottom line,” said Omanjana Goswami, a scientist with the food and environment program at the Union of Concerned Scientists. “Abandoning this will come at a cost to American farms and the taxpayer.”On Monday, the agriculture secretary, Brooke Rollins, defended dismantling PSCS, claiming it amounted to a Biden-era “climate slush fund” of which less than half the money went to farmers.A spokesperson added: “The USDA has a variety of programs available to producers who have been impacted by recent disasters … [and] is currently building a framework to deliver over $20bn in congressionally appropriated funds to producers who suffered losses during the 2023/2024 crop year. With 16 robust nutrition programs in place, USDA remains focused on its core mission: strengthening food security, supporting agricultural markets, and ensuring access to nutritious food.”And some Trump supporters are keeping the faith.“There are some concerns out there but our farmers are willing to make sacrifices for long-term gains,” said Sid Miller, the Texas agriculture commissioner. “Tariffs are a temporary tool, they won’t be permanent, China needs our grains, they are prideful but will come around like last time.” More

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      US’s $2.36tn tourism business fears ‘Trump slump’ over tariff turmoil

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      Batman said business was so-so, and King Kong beat his chest in agreement. But neither could predict that it would improve. Gotham’s caped crusader and his muscular ape neighbour could only hope. As with Times Square’s superhero-themed visitor-photography business last week, so it is with the US tourism business at large.The effect of economic and political turbulence on the number of foreign visitors coming to the US is for now hard to define. But both – whether through tariffs, currency exchange chaos, or fears over political ill-winds – are sending chills through the $2.36tn business, the world’s most powerful travel and tourism market.Warnings that international tourism to the US could be hit by Donald Trump’s effort to re-engineer economic and political relations with the rest of the world are slowly emerging.The federal government’s National Travel and Tourism Office released preliminary figures last week showing visits to the US from overseas fell 11.6% in March compared with the same month last year. According to the data released on Tuesday, international arrivals from China were down nearly 1%. Wolfgang Georg Arlt, the CEO of the China Outbound Tourism Research Institute, called it the “Trump Slump”.The Delta Air Lines CEO, Ed Bastian, also said the company would not expand flying in the second half of the year because of disappointing bookings amid Trump’s unpredictable trade policies after cutting its first-quarter earnings outlook, citing weaker-than-expected corporate and leisure travel demand.“In the last six weeks, we’ve seen a corresponding reduction in broad consumer confidence and corporate confidence,” Bastian told CNBC, adding things “really started to slow” in mid-February.The Las Vegas Visitors and Convention Authority said last week it was projecting a 5% decline in room tax revenue for its upcoming budget – a decline that may reflect Trump’s trade disputes with Canada and Mexico. Those countries account for 2.6 million visitors to sin city, or half of international travel trade.LVCVA’s president, Steve Hill, warned at a budget meeting that short-term projected declines do not make a trend, “although we do expect that this is the start of a decline in international visitation. At some level, the conversation around the tariffs has also alienated some of our potential visitors.”The travel forecasting company Tourism Economics, which late last year projected the US would have nearly 9% more international arrivals this year, along with a 16% increase in spending, revised its annual outlook last week to predict a 9.4% decline in arrivals.The company’s Geena Bevenour said in an email statement that the revised forecast represented “a substantial setback” and eclipsed “the US downside scenario we released in late-February, reflecting a more contentious context for inbound travel and more severe tariff announcements than previously expected.”On the upside, a weakening dollar against sterling, the euro, Japanese yen and Swiss franc could make travel to the US more attractive. Despite the variables, New York this week was full of international visitors, many on Easter break, and others from further afield.A couple from Scotland, who offered their names as James and Zoe, were waiting to board the Staten Island ferry with their two children on Thursday afternoon, and said they weren’t fazed about tariffs or anti-European rhetoric from the White House. Nor had they encountered elevated difficulties at immigration at JFK – aside from the long queues.Notwithstanding their advance booking, the couple said they would not hesitate to return – and had booked a holiday in Florida for next year. “I can see both sides, from a right and left perspective on tariffs and and the US wanting to put its house in order first.”A couple from Belgium, Dave and Gwen Desmet, returning from a boat trip to the Statue of Liberty, said they had been apprehensive at immigration but encountered no problems. But they said that if the trip had not already been booked, they would have waited to better understand the reality of the impact of Trump’s upheavals.“There’s more anxiety,” said Gwen, who said she had advised her son to delete an essay about Donald Trump on his laptop, adding that she was alarmed by changes to US government policy around diversity and gender.Her daughter had worried that it was “not a good time to go to New York”. But her husband, Dave, reasoned that media was “playing a big role” in stirring anxiety and “creating negativity”.Last week, China issued warnings for citizens considering travelling or studying in the US. China’s ministry of culture and tourism cited the “deterioration of China-US economic and trade relations and the domestic security situation in the United States”.American Ring Travel, a tour operator based in California, offers carbon-neutral bus tours of the US that often attract eco-conscious travelers from Europe, said bookings from Germany flattened starting in January after Elon Musk threw his support behind a far-right political party in that country’s federal election.Many travel agents say it may be too early to tell if, beyond visitors from Canada, the US will see its post-Covid gains in foreign tourism wiped out or even reversed.Later this month, the International Air Transport Association (IATA) will release new figures on international travel. Global hotel chains like Hilton Worldwide are seeing share price declines.One high-end travel agent, accustomed to arranging international White Lotus-style luxury holidays for wealthy clients, said he had not seen any changes – yet. But it was still early days. “I think we’re going to feel it soon. People aren’t exhausted yet. But they’re clearly stressed – and will be, especially if their disposable income gets hit,” they said. More

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      Obama condemns Trump’s $2.3bn Harvard funding freeze as ‘unlawful and ham-handed’ – US politics live

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      Good morning and welcome to our US politics blog.Former US president Barack Obama has condemned the education department for freezing $2.3bn in federal funds to Harvard University after the elite college rejected a list of demands from the White House.In some of his most vocal criticism of this Trump administration, Obama praised Harvard, the country’s oldest university, for setting an example for other higher education institutions to reject federal overreach into its governance practices.He wrote in a post on X:
      Harvard has set an example for other higher-ed institutions – rejecting an unlawful and ham-handed attempt to stifle academic freedom, while taking concrete steps to make sure all students at Harvard can benefit from an environment of intellectual inquiry, rigorous debate and mutual respect. Let’s hope other institutions follow suit.
      His comments came after Harvard decided to fight the White House’s demands that it crack down on alleged antisemitism and civil rights violations. It is the first major US university to defy pressure from the White House to change its policies.In a letter to Harvard on Friday, the administration called for broad government and leadership reforms, a requirement that Harvard institute what it calls “merit-based” admissions and hiring policies as well as conduct an audit of the study body, faculty and leadership on their views about diversity.The demands, which are an update from an earlier letter, also call for a ban on face masks, which appeared to target pro-Palestinian protesters; close its diversity, equity and inclusion programs, which it says teach students and staff “to make snap judgments about each other based on crude race and identity stereotypes”; and pressured the university to stop recognizing or funding “any student group or club that endorses or promotes criminal activity, illegal violence, or illegal harassment”.The administration also demanded that Harvard cooperate with federal immigration authorities.Harvard’s president said in a letter that the university would not comply with the Trump administration’s demands to dismantle its diversity programming and to limit student protests in exchange for its federal funding.“No government – regardless of which party is in power – should dictate what private universities can teach, whom they can admit and hire, and which areas of study and inquiry they can pursue,” Alan Garber, the university president, wrote, adding that Harvard had taken extensive reforms to address antisemitism.The department of education announced in March that it had opened an investigation into 60 colleges and universities for alleged “anti-Semitic harassment and discrimination”. It came after protests against Israel’s war on Gaza were put on across campuses last year, demonstrations that many Republicans framed as antisemitic.Harvard’s response to the White House’s demands was in sharp contrast to the approach taken by Columbia University, the epicentre of last year’s protests against Israel’s assault on Gaza.The Trump administration cut $400m in grants to the private New York school, accusing it of failing to protect Jewish students from harassment. The school caved in to demands and responded by agreeing to reform student disciplinary procedures and hiring 36 officers to expand its security team.Stay with us throughout the day as we have more reaction to this story and many others.Hugo Lowell is a reporter in the Washington bureau of the Guardian covering Donald Trump and the Justice DepartmentThe Trump administration on Monday misrepresented a US supreme court decision that compelled it to return a man wrongly deported to El Salvador, using tortured readings of the order to justify taking no actions to secure his release.The supreme court last week unanimously ordered the administration to “facilitate” the release of Kilmar Abrego García, who was supposed to have been protected from deportation to El Salvador regardless of whether he was a member of the MS-13 gang.But at an Oval Office meeting between Trump and El Salvador’s president Nayib Bukele, Trump deferred to officials who gave extraordinary readings of the supreme court order and claimed the US was powerless to return Abrego García to US soil.“The ruling solely stated that if this individual at El Salvador’s sole discretion was sent back to our country, we could deport him a second time,” said Trump’s policy chief Stephen Miller, about an order that, in fact, upheld a lower court’s directive to return Abrego García…The remarks at the Oval Office meeting marked an escalation in the Trump administration’s attempts to claim uncertainty with court orders to avoid having to take actions it dislikes. In Abrego García’s case, officials appeared to manufacture uncertainty in particularly blatant fashion.And the fact that the US is paying El Salvador to detain deportees it sends to the notorious Cecot prison undercut the notion that the administration lacked the power to return Abrego García into US custody.The case started when Abrego García was detained by police in 2019 in Maryland, outside a Home Depot, with several other men, and asked about a murder. He denied knowledge of a crime and repeatedly denied that he was part of a gang.Abrego García was subsequently put in immigration proceedings, where officials argued they believed he was part of the MS-13 gang in New York based on his Chicago Bulls gear and on the word of a confidential informant.The case went before a US immigration judge, who suggested that Abrego García could be a member of MS-13 and agreed to a deportation order but shielded him from being sent to El Salvador because he was likely to face persecution there by a local gang.The Trump administration did not appeal against that decision, and Immigration and Customs Enforcement has since said in a court filing that Abrego García’s deportation to El Salvador was an “administrative error”. The supreme court also called his removal illegal.You can read the full story here:One of China’s lead officials overseeing Hong Kong has condemned punitive US tariffs on China as “shameless” and attacked American “hillbillies” amid a continuing trade war between Beijing and Washington that has caused turmoil in global markets.Xia Baolong, director of the Hong Kong and Macao Work Office, said Hong Kong has never levied taxes on imports and that the US enjoyed a $272 bn trade surplus in the city over the past decade.US President Donald Trump has increased the levies imposed on China to 145%, while Beijing has set a retaliatory 125 percent toll on American imports – a move not followed by Hong Kong.Imposing tariffs on the city is “hegemonic and shameless in the extreme”, and shows that the US does not want Hong Kong to thrive, Baolong said in a pre-recorded speech at an event to mark the 10th iteration of China’s annual national security education day.He said the US “is the greatest culprit in undermining Hong Kong’s human rights, freedom, rule of law, prosperity and stability.”“It is not after our tariffs – it wants to take our lives,” Baolong was quoted as saying.He added that the sweeping US tariffs would not shake the determination of Beijing and Hong Kong governments and that “victory must belong to the great Chinese people”.“Let those American ’hillbillies’ wail before the 5,000-year-old civilisation of the Chinese nation” he said, adding that anyone seeking to bring China into poverty was an “enemy”.Hong Kong is a former British colony that became a special administrative region of China in 1997. In theory, it is governed under a system known as “one country, two systems”, a constitutional arrangement that promised Hong Kong a high degree of autonomy and rights protections.But it is widely seen to have reneged on the deal, crushing pro-democracy protests and imposing a national security law in 2020 – targeting secession, subversion, terrorism and collusion with foreign forces – which has in effect silenced opposition voices among Hong Kong’s once-vibrant civil society.Hong Kong is subject to the high US tariffs imposed on China as it is no longer considered a separate trading entity by Washington so means is not entitled to favourable trading terms anymore. Trump ended Hong Kong’s preferential trade status following China’s security crackdown on Hong Kong in 2020.As my colleague Martin Belam reports in our UK politics live blog, JD Vance has said the US is optimistic it can negotiate a “great” trade deal with the UK.In an interview with online outlet Unherd, the US vice president told Sohrab Ahmari:
      We’re certainly working very hard with Keir Starmer’s government. The president really loves the UK. He loved the queen. He admires and loves the king. It is a very important relationship. And he’s a businessman and has a number of important business relationships in [the UK].
      But I think it’s much deeper than that. There’s a real cultural affinity. And of course, fundamentally America is an Anglo country. I think there’s a good chance that, yes, we’ll come to a great agreement that’s in the best interest of both countries.
      Unlike China, Britain was spared the most punitive treatment in Trump’s initial tariff announcement on 2 April, but British imports in the US still incur a 10% charge while its steel and car sectors incur a rate of 25%.The UK government has been hopeful of a deal to exempt the UK from Trump’s tariffs.The UK’s chancellor, Rachel Reeves, will aim to continue negotiations for an economic deal with the US later this month when she travels to Washington to attend the International Monetary Fund’s spring meetings with other finance ministers. You can read more about Vance’s comments today in this article by my colleague Rachel Hall.South Korea has announced plans to invest an additional $4.9bn in the country’s semiconductor industry, citing “growing uncertainty” over US tariffs.“An aggressive fiscal investment plan has been devised to help local firms navigate mounting challenges in the global semiconductor race,” the finance ministry said.“To foster a dynamic, private sector-led ecosystem for semiconductor innovation and growth, the government will increase its investment in the sector from 26 trillion won ($18.2bn) to 33 trillion won,” the ministry added.Semiconductors are tiny chips that power just about everything, including computers, mobile phones and cars. They are central to the global economy. The UK, the US, Europe and China rely heavily on Taiwan for semiconductors.But South Korea – Asia’s fourth largest economy – is also a major exporter to the US and concerns about the semiconductor sector have hit the Seoul-listed shares of the world’s largest memory chip maker Samsung, and largest memory chip supplier SK Hynix.The statement of extra investment from South Korea’s finance ministry comes after the Trump administration launched investigations into imports of pharmaceuticals and semiconductors on national security grounds.These industries – so far exempt from the 10% US import charges that began on 5 April – may face tariffs after the probes are complete.US President Donald Trump has directed the US commerce department to conduct a three-week investigation into the imports, during which time public comments on the issue will be heard before a decision is made.Trump said on Sunday he would be announcing a tariff rate on imported semiconductors over the next week, adding that there would be flexibility with some companies in the sector.On 2 April, Trump announced sweeping tariffs on global trading partners, including the 25 percent on South Korean goods, before backtracking and suspending their implementation for 90 days.Even so, “duties targeting specific sectors such as semiconductors and pharmaceuticals, remain on the horizon”, finance minister Choi Sang-mok said during a meeting.“This grace period offers a crucial window to strengthen the competitiveness of South Korean companies amid intensifying global trade tensions,” he added.Good morning and welcome to our US politics blog.Former US president Barack Obama has condemned the education department for freezing $2.3bn in federal funds to Harvard University after the elite college rejected a list of demands from the White House.In some of his most vocal criticism of this Trump administration, Obama praised Harvard, the country’s oldest university, for setting an example for other higher education institutions to reject federal overreach into its governance practices.He wrote in a post on X:
      Harvard has set an example for other higher-ed institutions – rejecting an unlawful and ham-handed attempt to stifle academic freedom, while taking concrete steps to make sure all students at Harvard can benefit from an environment of intellectual inquiry, rigorous debate and mutual respect. Let’s hope other institutions follow suit.
      His comments came after Harvard decided to fight the White House’s demands that it crack down on alleged antisemitism and civil rights violations. It is the first major US university to defy pressure from the White House to change its policies.In a letter to Harvard on Friday, the administration called for broad government and leadership reforms, a requirement that Harvard institute what it calls “merit-based” admissions and hiring policies as well as conduct an audit of the study body, faculty and leadership on their views about diversity.The demands, which are an update from an earlier letter, also call for a ban on face masks, which appeared to target pro-Palestinian protesters; close its diversity, equity and inclusion programs, which it says teach students and staff “to make snap judgments about each other based on crude race and identity stereotypes”; and pressured the university to stop recognizing or funding “any student group or club that endorses or promotes criminal activity, illegal violence, or illegal harassment”.The administration also demanded that Harvard cooperate with federal immigration authorities.Harvard’s president said in a letter that the university would not comply with the Trump administration’s demands to dismantle its diversity programming and to limit student protests in exchange for its federal funding.“No government – regardless of which party is in power – should dictate what private universities can teach, whom they can admit and hire, and which areas of study and inquiry they can pursue,” Alan Garber, the university president, wrote, adding that Harvard had taken extensive reforms to address antisemitism.The department of education announced in March that it had opened an investigation into 60 colleges and universities for alleged “anti-Semitic harassment and discrimination”. It came after protests against Israel’s war on Gaza were put on across campuses last year, demonstrations that many Republicans framed as antisemitic.Harvard’s response to the White House’s demands was in sharp contrast to the approach taken by Columbia University, the epicentre of last year’s protests against Israel’s assault on Gaza.The Trump administration cut $400m in grants to the private New York school, accusing it of failing to protect Jewish students from harassment. The school caved in to demands and responded by agreeing to reform student disciplinary procedures and hiring 36 officers to expand its security team.Stay with us throughout the day as we have more reaction to this story and many others. More

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      US begins inquiry into pharmaceutical and chip imports in bid to impose tariffs

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      The Trump administration is kicking off investigations into imports of pharmaceuticals and semiconductors into the US as part of an attempt to impose tariffs on both sectors on national security grounds, notices posted to the Federal Register on Monday showed.The filings scheduled to be published on Wednesday set a 21-day deadline from that date for the submission of public comment on the issue and indicate the administration intends to pursue the levies under authority granted by the Trade Expansion Act of 1962. Such inquiries need to be completed within 270 days after being announced.The Trump administration has started 232 investigations into imports of copper and lumber, and inquiries completed in the US president’s first term formed the basis for tariffs rolled out since his return to the White House in January on steel and aluminum and on the auto industry.The US began collecting 10% tariffs on imports on 5 April. Pharmaceuticals and semiconductors are exempt from those duties, but Trump has said they will face separate tariffs.Trump said on Sunday he would be announcing a tariff rate on imported semiconductors over the next week, adding there would be flexibility with some companies in the sector.The US relies heavily on chips imported from Taiwan, something the then president, Joe Biden, sought to reverse by granting billions in Chips Act awards to lure chipmakers to expand production in the US.Taiwan’s economy minister, Kuo Jyh-huei, said its government would run simulations for various levels of tariffs on semiconductors and seek talks with the US.Taiwan is home to TSMC, the world’s leading producer of the most advanced chips and a main contributor to the island’s GDP. Speaking to reporters outside parliament, Kuo said he would seek to ensure “fair competition” for the Taiwanese industry.The Taiwanese and US chip sectors are complementary, he added.The investigation announced on Monday will include pharmaceuticals and pharmaceutical ingredients as well as other derivative products, the notice showed.Drugmakers have argued that tariffs could increase the chance of shortages and reduce access for patients. Still, Trump has pushed for the fees, arguing that the US needs more drug manufacturing so it does not have to rely on other countries for its supply of medicines.Companies in the industry have lobbied Trump to phase in tariffs on imported pharmaceutical products in hopes of reducing the sting from the charges and to allow time to shift manufacturing.Large drugmakers have global manufacturing footprints, mainly in the US, Europe and Asia, and moving more production to the US involves a major commitment of resources and could take years. More

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      Trump administration sued over tariffs in US international trade court

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      A legal advocacy group on Monday asked the US court of international trade to block Donald Trump’s sweeping tariffs on foreign trading partners, arguing that the president overstepped his authority.The lawsuit was filed by the Liberty Justice Center, a legal advocacy group, on behalf of five US businesses that import goods from countries targeted by the tariffs.“No one person should have the power to impose taxes that have such vast global economic consequences,” Jeffrey Schwab, Liberty Justice Center’s senior counsel, said in a statement. “The Constitution gives the power to set tax rates – including tariffs – to Congress, not the President.”The Liberty Justice Center is the litigation arm of the Illinois Policy Institute, a free market thinktank. It was instrumental in the supreme court case Janus v AFSCME in which it successfully fought to weaken public labor unions collective bargaining power.According to the group’s statement, the tariffs case was filed on behalf of five owner-operated businesses who have been severely harmed by the tariffs. The businesses include a New York-based company specializing in the importation and distribution of wines and spirits, an e-commerce business specializing in the production and sale of sportfishing tackle, a company that manufactures ABS pipe in the United States using imported ABS resin from South Korea and Taiwan, a small business based in Virginia that makes educational electronic kits and musical instruments, and a Vermont-based brand of women’s cycling apparel.Representatives of the White House did not immediately respond to an email seeking comment.The Trump administration faces a similar lawsuit in Florida federal court, where a small business owner has asked a judge to block tariffs imposed on China. More

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      Tariff turmoil to continue as Trump warns nobody ‘off the hook’ amid smartphone exemption – US politics live

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      Good morning and welcome to our US politics blog.In an announcement made late on Friday evening, Donald Trump’s presidential administration exempted smartphones and computers from the 125% levies imposed on imports from China as well as other “reciprocal” tariffs.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, in what seemed like a softening of the president’s trade positioning towards Beijing.US stock markets were expected to stage a recovery after the announcement. Shares in Apple and chip maker Nvidia were on course to surge after tariffs on their products imported into the US were lifted for three months.China’s commerce ministry said the exemption demonstrated the US taking “a small step toward correcting its erroneous unilateral practice of ‘reciprocal tariffs’,” and suggested the American administration cancel the whole punitive tariff regime.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.“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. “These are things that are national security, that we need to be made in America.”Amid the confusion over the White House’s tariff policy, Trump said he would provide more details on his administration’s approach on semiconductor tariffs later today.But he suggested any tariff exemption for China-made smartphones would be short-lived, writing on his social media: “Nobody is getting off the hook for unfair trade balances”. Stay with us throughout the day as we bring you the latest tariff developments and other US political stories.Spain’s economy minister, Carlos Cuerpo, is expected to meet the US treasury secretary, on Tuesday as he aims to bolster bilateral ties between the two countries.The Trump administration has slapped a 10% tariff on imports of most European goods, including olive oil, although it announced a 90-day pause last week on higher, 25% “reciprocal” duties.Spain is the world’s top exporter of olive oil and also sells important quantities of auto parts, steel and chemicals to the US. The country’s prime minister, Pedro Sánchez, has announced a €14.1bn (£12.2bn; $16bn) government aid package to industry to lessen the domestic impact of Trump’s levies.Maya Yang, a breaking news reporter and live blogger for Guardian US, has filed this story about a warning over the potential consequences of Trump’s erratic economic policies:Billionaire investor Ray Dalio said that he is worried the US will experience “something worse than a recession” as a result of Donald Trump’s trade policies.Speaking to NBC’s Meet the Press on Sunday, the 75-year-old hedge fund manager said: “I think that right now we are at a decision-making point and very close to a recession. And I’m worried about something worse than a recession if this isn’t handled well.”He went on to add: “A recession is two negative quarters of GDP and whether it goes slightly there. We always have those things. We have something that’s much more profound. We have a breaking down of the monetary order. We are going to change the monetary order because we cannot spend the amounts of money.”Dalio’s comments come in response to a tumultuous week across the global stock markets following the US president’s tariffs policies that include a 145% tariff raise on China. The billionaire also said there are “profound changes in our domestic order … and world order”, comparing current times with the 1930s.“I’ve studied history and this repeats over and over again. So if you take tariffs, if you take debt, if you take the rising power challenging existing power, if you take those factors and look at the factors, those changes in the orders, the systems, are very, very disruptive. How that’s handled could produce something that is much worse than a recession. Or it could be handled well,” he said.Dalio, who correctly predicted the 2008 recession, also said the current economic state of the US is “at a juncture”.“Let’s take the budget. If the budget deficit can be reduced to 3% of GDP, it will be about 7% if things are not changed. If it could be reduced to about 3% of GDP, and these trade deficits and so on are managed in the right way, this could all be managed very well,” he said.He went on to urge congressional members to take what he calls the “3% pledge”, adding that if they don’t, there will be a supply and demand problem for debt with results that will be “worse than a normal recession.”You can read the full story here:Chinese President Xi Jinping will be welcomed by Vietnam’s President Luong Cuong today as he seeks to strengthen economic ties in south-east Asia amid a trade war with Washington that has caused turmoil in global markets.In an article for the Nhan Dan newspaper, Xi called for more regional cooperation, saying China and Vietnam were “friendly socialist neighbours sharing the same ideals and extensive strategic interests”.He added that a “trade war and tariff war will produce no winner, and protectionism will lead nowhere”, without explicitly mentioning the US.The visit, planned for weeks, comes as Beijing faces 145% US duties, while Vietnam is negotiating a reduction of threatened US tariffs of 46%. China is Vietnam’s biggest trading partner; Hanoi has a good relationship with both Washington and Beijing.As my colleague Rebecca Ratcliffe notes in this story, officials in Hanoi were shocked when Vietnam was hit with the 46% tariff, even after various efforts to appease the Trump administration. The tariff, which has been paused, threatens to devastate the country’s ambitious economic growth plan.Xi will visit Vietnam, a manufacturing powerhouse, from 14 to 15 April, and Malaysia and Cambodia from 15 to 18 April. He last visited Cambodia and Malaysia nine and 12 years ago, respectively.Xi’s trip to Hanoi, his second in less than 18 months, aims to consolidate relations with a strategic neighbour that has received billions of dollars of Chinese investments in recent years as China-based manufacturers moved south to avoid tariffs imposed by the first Trump administration.Good morning and welcome to our US politics blog.In an announcement made late on Friday evening, Donald Trump’s presidential administration exempted smartphones and computers from the 125% levies imposed on imports from China as well as other “reciprocal” tariffs.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, in what seemed like a softening of the president’s trade positioning towards Beijing.US stock markets were expected to stage a recovery after the announcement. Shares in Apple and chip maker Nvidia were on course to surge after tariffs on their products imported into the US were lifted for three months.China’s commerce ministry said the exemption demonstrated the US taking “a small step toward correcting its erroneous unilateral practice of ‘reciprocal tariffs’,” and suggested the American administration cancel the whole punitive tariff regime.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.“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. “These are things that are national security, that we need to be made in America.”Amid the confusion over the White House’s tariff policy, Trump said he would provide more details on his administration’s approach on semiconductor tariffs later today.But he suggested any tariff exemption for China-made smartphones would be short-lived, writing on his social media: “Nobody is getting off the hook for unfair trade balances”. Stay with us throughout the day as we bring you the latest tariff developments and other US political stories. More

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      ‘The sky won’t fall’: China plays down Trump tariff risks as stock markets rally

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      China has played down the risk of damage to its exports from Donald Trump’s tariffs, with an official saying the “the sky won’t fall”, as stock markets rose on Monday amid signs of a retreat on electronics restrictions.The world’s second-largest economy has diversified its trade away from the US in recent years, according to Lyu Daliang, a customs administration spokesperson, in comments reported by state-owned agency Xinhua.China has retaliated forcefully to Washington’s tariffs, with 125% levies on US imports against the US’s total of 145% border taxes on goods moving the other way. The trade war has prompted turmoil on financial markets since Trump first revealed tariffs on every country in the world on 2 April. Since then he has partly retreated on the highest levies on most trading partners for at least 90 days, but has doubled down in his spat with China.The White House offered further relief over the weekend with an exemption from the steepest tariffs for electronics including smartphones, laptops and semiconductors. Trump officials later appeared to walk that back with the commerce secretary, Howard Lutnick, saying such devices would be “included in the semiconductor tariffs which are coming in probably a month or two”.Trump said on Sunday night on his social network, Truth Social, that “NOBODY is getting ‘off the hook’”, highlighting that smartphones are still subject to 20% levies and suggesting they could still rise higher.However, investors on Monday appeared unconvinced by Trump’s attempts to play down the retreat. Japan’s Nikkei gained 1.2% while Hong Kong’s Hang Seng rose by 2.2% and the Shanghai and Shenzhen exchanges climbed by 0.8% and 1.2%, respectively. European stock market indices also jumped in opening trades, with London’s FTSE 100 up by 1.6%, Germany’s Dax up 2.2%, and France’s Cac 40 up 2%.“The sky won’t fall” for Chinese exports,” China’s Lyu said. “These efforts have not only supported our partners’ development but also enhanced our own resilience”.The customs report also played up China’s “vast domestic market”, and said “the country will turn domestic certainty into a buffer against global volatility”. China has increasingly tried to stimulate private consumption.skip past newsletter promotionafter newsletter promotionChina’s president, Xi Jinping, on Monday criticised the US tariffs, during a visit to Vietnam. Vietnam has in recent decades grown to become the eighth largest source of goods for US consumers, but it is facing the threat of 46% tariffs when Trump’s 90-day pause expires.In an article in a Vietnamese newspaper, Xi said that a “trade war and tariff war will produce no winner, and protectionism will lead nowhere”. More