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

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

      Nesrine Malik is a Guardian columnist

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

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

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      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’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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      Panama opposition party accuses US of ‘camouflaged invasion’

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      Panamanian opposition politicians have accused the US of launching a “camouflaged invasion” of the country, amid simmering discontent over the government’s handling of the diplomatic crisis.After a three-day visit by the US defense secretary, Pete Hegseth, Donald Trump appeared to confirm that US military personnel had been deployed to the Central American country on Thursday, telling reporters: “We’ve moved a lot of troops to Panama.”Hegseth said that the US would increase its military presence at three former US bases in the country to “secure the Panama canal from Chinese influence”.The last US military bases in Panama were vacated in 1999 as a condition of the 1977 Torrijos-Carter treaties to hand the canal to Panamanian ownership. Under the canal’s neutrality treaty, no foreign power can “maintain military forces, defense sites and military installations within its national territory”, and the US comments have prompted outrage in Panama.“This is a camouflaged invasion,” said Ricardo Lombana, the leader of the opposition Other Way Movement. “An invasion without firing a shot, but with a cudgel and threats.”At a Wednesday press conference to announce the signing of a memorandum of understanding (MOU) with the US, Panama’s minister of public security, Frank Abrego, said the agreement would not impinge on his nation’s sovereignty and that the country would not accept military bases.However, a full text of the MOU included aerial photos of Fort Sherman, Rodman naval base and Howard air force base, with areas outlined for “training”, “humanitarian activities” and the “installation of US property”.The Panamanian government says they are not “military bases” and that the deal is temporary, but opposition parties have rejected such claims.“If you have an installation which is for use of foreign soldiers and they have control over what happens inside – and Panama has to ask in advance to enter – that’s a military base,” said Lombana.For many Panamanians, the return of US armed forces – even for supposed “joint operations” – will bring back uncomfortable memories of 1989’s Operation Just Cause, when American troops killed thousands of civilians.A second agreement allows US navy ships to be reimbursed for the fees they pay to the canal. That preferential treatment would appear to violate the neutrality treatment and could open the door to further attempts to negotiate down the fees charged by the canal.On Thursday a local lawyer filed a legal case against the Panamanian president, José Raúl Mulino, accusing him of “crimes against the international personality of the state”.Frustration is growing over the government’s handling of the diplomatic crisis. Since Trump declared his plan to “take back” the Panama canal on his 20 January inauguration speech, all communication on the topic has been through Mulino and the details of negotiations kept largely secret.This has led to serious differences in the US and Panamanian accounts of those negotiations. When the secretary of state, Marco Rubio, visited in early February, Mulino told press that the meeting had been “very cordial” and that the canal was not under threat. Later, however, Rubio said the situation around the canal was “unacceptable” and Trump continued to call for the return of the canal.The latest example came on Tuesday when two different statements concerning Hegseth’s meeting with Mulino were published. In the Panamanian version, Hegseth was said to have recognized Panama’s “inalienable sovereignty” over the canal, but those words were absent from the secretary of defense’s statement and Hegseth refused to acknowledge Panamanian ownership of the canal at Wednesday’s press conference. Panama says that the US omitted the phrase from the agreed joint statement.Mulino has also opted to avoid engaging with other countries – such as Canada and Mexico – to gain international support for his country’s cause.On Thursday the local chapter of Transparency International requested on X that Mulino “inform the country of all the details of what is happening, the agreements in process and the pressures he is receiving if that is the case. The country requires transparency in order to achieve unity against this threat to our sovereignty.”Even before Hegseth’s visit, Mulino had faced heavy local criticism for offering concessions to the US without gaining firm assurances over the future of the canal.Two-thirds of Panamanians disapprove of the way he is running the country. In addition to the diplomatic crisis he has passed an unpopular social security reform and angered environmentalists by opening talks with a copper mine closed down in 2023 due to popular protest. He lacks the backing of many of his party’s deputies in congress who are loyal to his political patron, Ricardo Martinelli, who has been residing in the Nicaraguan embassy to escape corruption charges and recently saw his attempt to gain exile in that country rejected.Popular demonstrations against US policy and the handling of the government are expected on Saturday. More

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      Trump insists tariff war is ‘doing really well’ as recession fears mount

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      Donald Trump insisted his trade war with much of the world was “doing really well” despite mounting fears of recession and as Beijing hit back and again hiked tariffs on US exports to China.As the US president said his aggressive tariffs strategy was “moving along quickly”, a closely watched economic survey revealed that US consumer expectations for price growth had soared to a four-decade high.The White House maintains that the US economy is on the verge of a “golden age”, however, and that dozens of countries – now facing a US tariff of 10% after Trump shelved plans to impose higher rates until July – are scrambling to make deals.“The phones have been ringing off the hook to make deals,” the press secretary, Karoline Leavitt, told reporters on Friday.Beijing raised Chinese tariffs on US products to 125% on Friday – the latest salvo of its escalating trade dispute with Washington – and accused Trump of “unilateral bullying and coercion”.“Even if the US continues to impose even higher tariffs, it would no longer have any economic significance, and would go down as a joke in the history of world economics,” the Chinese finance ministry said.Few investors were laughing. US government bonds – typically seen as one of the world’s safest financial assets – continued to be sold off, and were on course for their biggest weekly loss since 2019. The dollar also fell against a basket of currencies, and was down against the euro and the pound.Leading stock indices paused for breath on Friday after days of torrid trading. The FTSE 100 rose 0.6% in London. The S&P 500 increased 1.8% and the Dow Jones industrial average gained 1.6% in New York.The S&P 500 finished an extraordinarily volatile week for markets up 5.7%, its biggest weekly gain since November 2023.“We are doing really well on our TARIFF POLICY,” Trump wrote on his Truth Social platform. “Very exciting for America, and the World!!! It is moving along quickly. DJT”Some of Wall Street’s most influential figures were unconvinced. “I think we’re very close, if not in, a recession now,” Larry Fink, CEO of the investment giant BlackRock, told CNBC. Far from providing certainty, the 90-day pause on higher US tariffs on much of the world “means longer, more elevated uncertainty”, he added.Jamie Dimon, CEO of JPMorgan Chase, the US’s largest bank, said the world’s largest economy was facing “considerable turbulence” as a key measure of consumer confidence tumbled to its lowest level since the Covid-19 pandemic – and the second-lowest level on record.US consumer sentiment has dropped 11% to 50.8 this month, ahead the pause announced by Trump earlier this week, according to a regularly survey compiled by the University of Michigan.Expectations for inflation meanwhile surged, with respondents indicating they are bracing for prices to rise by 6.7% over the coming year – the survey’s highest year-ahead inflation expectation reading since 1981.“There is great optimism in this economy,” Leavitt claimed at the White House briefing when asked about the survey. “Trust in President Trump. He knows what he’s doing. This is a proven economic formula.”Trump won back the White House last November by pledging to rapidly bring down prices – something he has claimed, in recent weeks, is already happening. US inflation climbed at an annual rate of 2.4% last month, according to official data.skip past newsletter promotionafter newsletter promotion“Consumers have spiralled from anxious to petrified,” observed Samuel Tombs, chief US economist at Pantheon Macroeconomics. He added, however, that a bipartisan divide – with Democrats growing more pessimistic, while Republicans become more upbeat – suggests that people are allowing their political views to cloud their economic confidence.The US’s top markets watchdog is facing demands from senior Democrats to launch an investigation into alleged insider trading and market manipulation after Trump declared on social media that it was “A GREAT TIME TO BUY!!!” hours before announcing Wednesday’s climbdown on tariffs.Days of erratic policymaking constructed a rollercoaster week for markets, with the S&P 500 dropping 12% in just four sessions, before surging back almost 10% in a single day after the administration pulled back from imposing higher tariffs on most countries, except China, which is facing a 145% tariff on exports to the US.In a letter to the US Securities and Exchange Commission (SEC), Senate Democrats including Elizabeth Warren and Chuck Schumer wrote: “It is unconscionable that as American families are concerned about their financial security during this economic crisis entirely manufactured by the President, insiders may have actively profited from the market volatility and potentially perpetrated financial fraud on the American public.”Tesla meanwhile stopped taking orders in China for two models it previously imported from the US, as companies scramble to adapt to prohibitive tariffs imposed in Trump’s trade war.The manufacturer, run by Trump’s close ally Elon Musk, removed “order now” buttons on its Chinese website for its Model S saloon and Model X sports utility vehicle.Tesla did not give any indication of why it had made the changes but it came after the rapid escalation of the trade war between the US and China.The border taxes make the goods trade between the two countries prohibitively expensive and mean cars imported from the US are now much less attractive in China than those produced locally.In the UK, economists warned that stronger than expected growth of 0.5% in February is likely to prove short lived as the impact of Trump’s trade war is felt throughout the global economy. 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      Trump was playing chicken with tariffs. Then he chickened out | Steven Greenhouse

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      By imposing punitively high tariffs, Donald Trump was playing a high-stakes game of chicken with the US’s trading partners – but it was Trump who chickened out and suspended his tariffs just hours after they took effect. The president couldn’t ignore the worldwide economic havoc that he had caused singled-handedly – stock markets were plunging, business executives were panicking and consumers were seething.Eager to persuade manufacturers to build new plants in the US, Trump said on Monday that many of his tariffs would be permanent. But for Trump, permanent evidently meant two days.Once again, Trump showed that his second term is one of fiat, flub and flip-flop, of bluster and blunder, of shooting first and aiming later. It’s also a mix of cutting, gutting and cruelty.And foolery. Trump’s tariffs are worse than, as the Wall Street Journal put it, the “dumbest trade war in history”: they are the dumbest economic policy that any US president has ever adopted. His tariffs quickly caused vast and totally unnecessary damage to stock markets, industries and diplomatic relations across the globe. Before Trump unexpectedly suspended the tariffs, US stock markets had lost more than $10tn in value, and stock markets overseas plummeted, too. Millions of retirees had seen their 401(k)s plunge in value, consumers were facing substantially higher prices and many workers were already losing their jobs as Trump’s tariffs sent shockwaves through the global economy.Trump’s embarrassing climbdown on tariffs was one of the rare times he bowed to common sense. If only he would do the same when it comes to his dangerously myopic cuts to scientific research, environmental protection and foreign aid.Trump has not climbed down, however, in his showdown with China. In a fit of pique over China’s retaliatory tariffs, Trump has imposed stratospheric 145% tariffs on China. Attention Walmart shoppers: that is going to more than double the price of many things you buy.When it came to tariffs, Trump made some basic political fumbles. Not only did he go golfing and speak at a million-dollar-a-head fundraiser as this economic disaster unfolded, but he failed to give a coherent explanation for his screw-everyone-else tariffs. Trump and his team pointed to a potpourri of often-conflicting goals: to erase trade deficits, to collect trillions of dollars for the treasury, to bring back manufacturing jobs, to give Trump negotiating leverage to crack down on fentanyl and immigration and reduce other countries’ tariffs.Let’s not delude ourselves. There are two main reasons for Trump’s tariffs: first, to satisfy his never-ending thirst for vengeance against those he feels have wronged him (which seems to mean every country in the world except Russia) and second, to fulfill his desire to wield a club over everyone and everything. By using staggeringly high tariffs as a weapon, Trump has been acting like a mob enforcer, telling every business in town: I’m going to clobber you with my baseball bat unless you do what I want.There’s another reason for Trump’s tariffs: his ignorance about how the world’s economy works. Trump’s “liberation day” speech on tariffs gave the looney, but unmistakable, impression that he believes that Vietnam, for instance, is looting and pillaging the US by selling more sneakers and other goods to the US than the US sells to Vietnam. Trump thinks this even though millions of Americans are delighted to buy well-made sneakers from Vietnam (which would cost consumers far more if they were made in the US).With his grievance-driven, zero-sum worldview, Trump no doubt believes that other countries are unfairly taking advantage of the US whenever we trade with them – and he wants to get even.Trump thinks that trade deficits are evil. If Trump had taken a class with Robert Solow, a Nobel Prize-winning economist at MIT, he might have heard Solow’s wisdom about why there’s no big worry about bilateral trade deficits: “I have a chronic deficit with my barber, who doesn’t buy a darned thing from me.”That Trump got to impose his calamitous tariffs at 12.01am on Wednesday reflects the dismal quality of his cabinet and advisers. Too many are lackeys who automatically cheer whatever he does, while some others, like the treasury secretary, Scott Bessent, no doubt realized that his tariffs were dumb and disastrous, but they’re too cowardly to tell the Tariff King. The tariffs would inevitably increase inflation and probably push the US into recession. Even though Republicans have vowed never to raise taxes, Trump’s tariffs are unarguably a tax, a regressive tax and the largest tax increase in 60 years. Trump’s tariffs were bound to destroy smoothly running supply chains and hurt untold numbers of US companies. They were also a disaster for relations with our allies. They were already triggering massive retaliation.If Trump had some smart, principled advisers, they might explain to him that many obstacles might prevent his tariffs from achieving their goals. With the nation’s low 4% unemployment rate, it will be hard to find workers to do the manufacturing jobs that Trump wants to bring back, especially when he’s rounding up and expelling many immigrant workers. Moreover, US corporations have largely lost the technological knowhow to compete in various industries and that complicates hopes to bring back far more factories.Then there’s another big problem – the chaotic Trump is the worst possible president to persuade companies to build factories in the US to produce goods they now obtain from abroad. King Donald the Capricious does not exactly exude the air of stability that executives insist on before they decide to make big investment decisions, like building new factories.Trump trumpeted his tariffs in part to show strength, but he ended up in an embarrassing retreat (he did maintain a 10% tariff on many countries). Trump is eager to get China to heed his wishes, but China, the world’s leading manufacturing country, can now see that Trump will back down when the heat is too great.China doesn’t have clean hands on trade. It improperly subsidizes many industries to help them outcompete manufacturers in the US and elsewhere. China also has ambitions to vastly increase its manufacturing capacity – a strategy that could kill off important industries in the US, Canada, Europe, Japan and other countries. If Trump were smart and strategic, he – instead of alienating those countries with his tariffs – would have formed an alliance with those countries to pressure China. But now those countries are too angry at the Trump to do that.Trump, never one to admit defeat, insists that his climbdown was a victory, that the mess he made was marvelous strategy. He says many countries are eager to make deals with him. “I’m telling you, these countries are calling us up, kissing my ass,” he said on Wednesday. “They are dying to make a deal.”Our allies are no doubt furious with Trump. Not only were they already angry that he stabbed Ukraine in the back and sidled up to Putin, but they’re unhappy that his tariff foolishness violated numerous international agreements and sought to blow up a smoothly running trade system. And then Trump ridicules them by saying they were rushing to kiss his behind.I hardly ever agree with Elon Musk, but he was right that Trump’s tariffs were the work of morons who were “dumber than a sack of bricks”.

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