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      Elon Musk’s journey from climate champion to backing EV-bashing Trump

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      Donald Trump’s attempts to slash incentives for electric cars would cause sales of the vehicles to plummet, with this effort cheered on by a seemingly confounding supporter – Elon Musk, the billionaire chief executive of Tesla and erstwhile champion for action on the climate crisis.Trump has said that he “will revoke the electric vehicle mandate, saving our auto industry and keeping my sacred pledge to our great American auto workers”.The US president, who previously suggested supporters of EVs “rot in hell” before somewhat tempering his rhetoric, has already ditched an aspirational goal for half of all car sales to be electric by the end of the decade, halted some funding for EV chargers and began reversing vehicle pollution standards that prod auto companies to shift away from gasoline models.A key tax credit for Americans buying an EV, worth up to $7,500, is also a major target for elimination, although to overturn this Trump will require Republicans in Congress. Should he succeed, though, the impact would be significant, with a recent study finding that electric car sales could fall by 27% without the incentive.“Turning off the credits would affect a meaningful share of the EV market,” said Joseph Shapiro, a University of California, Berkeley, economist and co-author of the study, who added that while a growing number of people would still go electric, the total number of cars sold would shrink by more than 300,000 a year than if the incentives stayed in place.“You could say that it would be a speed bump in the road but if the US goes all electric in 2090 rather than 2050, say, that matters a lot for the planet,” he said. “A lot of carbon would be emitted in that time.”Trump’s agenda has been enthusiastically backed by Musk, despite the world’s richest person heading Tesla, the market-leading EV company that also relies upon some parts made in China that may be targeted by tariffs imposed by Trump.Musk has said, though, that removal of EV subsidies will hurt rivals such as Ford and General Motors more than Tesla. “Take away the subsidies,” Musk wrote on X, another of his companies, in July. “It will only help Tesla.”There is some logic to this, Shapiro said. Tesla is comfortably the largest EV brand in the US, accounting for nearly half of all sales, and makes more profit per car than its rivals, meaning the removal of incentives would be disproportionately felt by other manufacturers.View image in fullscreen“If the tax credit is removed Tesla could survive and have less competition, they have more headroom to withstand a decrease in the market size,” Shapiro said. Stock in Tesla surged following Trump’s election win.However, Tesla will still be affected. Weakening federal pollution rules, for example, could see a reduction in the amount of carbon credits Tesla sells to other car companies – amounting to $2.7bn just last year – to offset their emissions and avoid fines. Tesla’s sales dipped slightly for the first time in 2024, amid concern among some of its traditionally liberal customer base about Musk’s rightward political turn.“Tesla isn’t immune to sales being impacted, they have some brand loyalty although we don’t know what the impact Elon Musk has had on polarizing consumers yet, that’s still a bit of an unknown,” said Stephanie Valdez Streaty, director of industry insights at Cox Automotive, which estimates EVs will have a 10% share of US car sales this year, up from 8% in 2024.Regardless, Musk’s focus has now seemingly shifted away from EVs to other areas such as robotics, artificial intelligence and his SpaceX venture, Valdez Streaty said. He has also embraced rightwing fixations shared by Trump. In a speech after the president was inaugurated, Musk made no mention of cars but said that the “future of civilization is assured” with “safe cities, secure borders, sensible spending, basic stuff”.He added: “We’re going to take Doge to Mars,” in reference to the “department of government efficiency” he heads in an effort to curb spending. “Can you imagine how awesome it will be to have American astronauts plant the flag on another planet for the first time? Bam. Bam. Yeah. How inspiring would that be?”Concern over the climate crisis is seemingly no longer one of Musk’s priorities, despite previously saying he is “super pro-climate” and in 2016 calling for a “popular uprising” against the fossil fuel industry because the world was “unavoidably headed toward some level of harm and the sooner we can take action, the less harm will result”.When Trump removed the US from the Paris climate agreement in 2017, Musk said he was quitting a presidential advisory body in protest. “Climate change is real,” he tweeted at the time. “Leaving Paris is not good for America or the world.”But Musk has had little to say after Trump, who memorably called climate change “a giant hoax”, once again pulled the US from the Paris deal and issued a flurry of orders to ramp up oil and gas drilling and stymie renewable energy production. In January, Musk said: “Climate change risk is real, just much slower than alarmists claim.”Critics say it is unlikely Musk will reflect the growing alarm voiced by scientists, and the American public, over the impacts of dangerous global heating within the Trump administration.“It just shows he’s an opportunist, really,” said Paul Bledsoe, who was a climate adviser to Bill Clinton’s White House. “He now downplays the dangers of climate change, but I think in the back of his mind he’s thinking about using government contracts for geoengineering as the costs of climate change become so undeniably expensive.”Those who know Musk say that he soured on Democrats in part after not being invited to a major summit on electric cars held by the White House in 2021, after Joe Biden became president.“That was an unforced error by Biden,” said Robert Zubrin, a leading advocate for human exploration of Mars who said he helped introduce Musk to the idea of Martian expansion. “And in the past two years, Elon Musk has redefined himself from the white knight of environmentalists to a Bond villain.”Zubrin said that Musk’s “central motivation is the desire for eternal glory for doing great deeds. He wants to save civilization because he wants to be famous for saving civilization.“This desire for eternal glory for doing great deeds has motivated his primary accomplishments, Tesla and SpaceX,” he added. “But it also has a dark side to it, and this has been exploited.”Tesla was contacted about its stance towards the EV tax credits but did not respond. More

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      If Trump really cared about his ‘favourite’ US president, he would leave Gaza and Greenland alone | Simon Jenkins

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      Donald Trump’s favourite US president was William McKinley. Who he? In his inaugural address, Trump pledged to restore the name Mount McKinley to North America’s highest peak. It was an anti-woke dig at Barack Obama, who had given it the Alaskan native name of Denali. But why this idolatry?The answer has since become clear. McKinley was the president (1897-1901) who introduced super-tariffs in his first year in office to protect the US’s post-recessionary manufacturers. Some were as high as 57%, and were seen as an alternative fundraiser to income tax. McKinley was also appealing to Trump for presiding over the founding of a hesitant US empire beyond the North American continent, one from which it has since retreated. Apart from that, the man was unostentatious, intelligent and impeccably polite, faults that Trump is clearly ready to forgive. His only carelessness was to be assassinated six months into his second term.Trump has blatantly sought to mimic McKinley’s policies over the past fortnight. It is therefore worth studying what his hero actually did. Unlike Trump, McKinley made sure that his tariffs were approved by Congress. Indeed, the constitution then required it – and technically still does. He was emphatic that they should be based on treaties embracing reciprocity. They should be treaties.In the event, the tariffs were not seen as critical to economic recovery. They were also blamed for a 25% rise in the cost of living. McKinley lost enthusiasm for them and became instead a champion of global free trade. He formed a group of nations to pursue an open-door policy, aimed at strengthening trade with China. He never saw tariffs as tactical weapons of foreign policy, nor used Trump’s description of his trading partners as “atrocious”.As for seeking new colonies, historians regard McKinley as at best an accidental imperialist. A year after his 1897 tariffs were introduced, the US was faced with the effective collapse of the Spanish empire, with armed insurrections in Cuba and the Philippines. Like many Americans, McKinley welcomed the arrival of new and free states. But he was adamantly against aiding them in wars against Spain. His much-cited quote was that “war should never be entered upon until every agency of peace has failed”. He had seen the civil war, and never wanted to see another one.View image in fullscreenYet he was under pressure. This was a time when European nations were reaching their imperial limits. It was an opportunity for the US to spread its wings, and many of McKinley’s colleagues were eager for the challenge. Over the course of 1898, war fever against Spain became hysterical. The Hearst and Pulitzer newspapers daily demanded intervention in the Caribbean and the Pacific. Showered with petitions, Congress demanded, in effect, that McKinley declare war on Spain.He did so under protest. His belligerent assistant navy secretary, the young Teddy Roosevelt, had already mobilised the navy, aiming it at Cuba and the Philippines. Roosevelt then formally resigned his position and led a volunteer regiment to fight in Cuba amid a blaze of publicity. He had accused McKinley of having “no more backbone than a chocolate eclair”. He was nonetheless chosen as McKinley’s vice-president in 1900.These interventions did not result from any threat to US territory or sovereignty. They were naked acts of aggression. They were spectacularly egged on by Rudyard Kipling’s poem, The White Man’s Burden, directed at the Philippines and published in the New York Sun. It challenged America to take over from the British empire, to fight “the savage wars of peace” against “sloth and heathen folly”.McKinley throughout was on the side of negotiation and peace. The Spanish war ended in a treaty signed in Paris in December 1898, which ceded America varying measures of control over Cuba, Puerto Rico, Guam and the Philippines. McKinley agreed with an anti-imperial majority in Congress that, once pacified, the US should deny any “intention to exercise sovereignty, jurisdiction, or control”. The government of the islands must be left to their people. The only “imperial” acquisition that McKinley did undertake was that of Hawaii, to prevent it falling into the hands of Japan.View image in fullscreenOn McKinley’s assassination in 1901, it was Roosevelt who assumed control of these territories, did not leave and retained them into the 20th century. It was also Roosevelt who backed rebels in seizing Panama from Colombia and giving the US control of the canal’s building and fortification. This was highly controversial. Roosevelt was challenged in Congress and by the New York Times for “an act of sordid conquest”. If Trump is seeking to emulate an earlier president, it is surely Roosevelt – described as the “bucking bronco” of American imperialism – he should be worshipping.Almost every president comes to office asserting if not isolationism, then a refusal to commit money or resources to setting the world to rights. Yet all are seduced by the power of office and the language of the founding fathers. They come to see the US’s “manifest destiny” as being to champion freedom and democracy wherever it is threatened. From Woodrow Wilson to Franklin Roosevelt, from JFK to Johnson and the Bushes father and son, all came to see themselves as global crusaders for that cause.In 2016, Trump refreshingly described the interventionism of his predecessors as a “total disaster”. He stuck to his guns and almost entirely avoided troop deployments during his first term of office. The world at least knew where it stood.His emphasis on putting America’s interests first was repeated in 2024. But this time the prospect is uncertain. In his inaugural speech, he described his task as one that “expands our territory … and carries our flag into new and beautiful horizons”. He even used the fell phrase, manifest destiny, as being one he would “pursue … into the stars … to plant the Stars and Stripes on the planet Mars”. Not content with Mars, he has set his sights on Panama, Greenland and Gaza.These territories might not match the ambitions of a Kipling or a Roosevelt, but Trump’s current intentions are hardly pacific. If he is to deify McKinley, he might first seek to find out a bit more about him.

      Simon Jenkins is a Guardian columnist

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      California city partners with US border patrol to surveil beach for migrant boats

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      Leaders of the southern California city of San Clemente, located about halfway between Los Angeles and San Diego, are partnering with US Customs and Border Protection to place surveillance cameras along the city’s beach to detect boats carrying passengers attempting to enter the country without authorization.At a Tuesday gathering of the town’s city council, members ordered city manager Andy Hall to begin coordinating with Customs and Border Protection (CBP).Mayor Steven Knoblock – a Republican who was elected in November on a public safety platform – told the Los Angeles Times the cameras are intended to spot fishing boats, called pangas, attempting to dock on San Clemente’s shores and to lower crime rates.“People have observed pangas crammed with illegal aliens, hitting our beach, and then scattering in the community or jumping into a van, which is parked nearby and ready to receive them,” Knoblock told the LA Times.He added: “San Clemente has had significant crime issues with the sophisticated Chilean burglary rings hitting our neighborhoods on a very systematic basis and continues to be a problem.”The state of California has prohibited law enforcement from cooperating with federal immigration authorities since 2017, when the state passed its “sanctuary state” law in an effort to prevent mass deportations during the first Trump administration. After Donald Trump’s victory in the November 2024 election, Democratic California governor Gavin Newsom gathered lawmakers for a special legislative session to “Trump-proof” the state. But since wildfires devastated much of southern California, the state is now seeking federal aid to rebuild.Before San Clemente city council members voted to collaborate with CBP on the camera initiative, the city had been considering joining a lawsuit against the state’s sanctuary law.San Clemente will not technically be violating the sanctuary state law by coordinating with CBP. The law specifically prevents law enforcement from cooperating with CBP, but San Clemente does not have its own police force. Instead, the city will work directly with border patrol.Knoblock has proposed installing cameras that operate 24/7 and cover about 7 miles of territory.skip past newsletter promotionafter newsletter promotion“I’m recommending the cameras being aimed oceanward with a rotating telescopic lens and thermal imaging for night viewing,” Knoblock told the LA Times. “This additional visibility will hopefully provide interdiction prior to [migrants] hitting our beaches.”City officials are also considering ways to open access to the footage to the public.This is not Knoblock’s first time challenging California sanctuary laws. As a city council member in 2022 he sponsored a measure calling for California to become a “sanctuary city for life” – in contrast with California’s laws permitting abortion.Nor is it the first time a California city has challenged the state’s sanctuary law for immigrants. In December, the San Diego county sheriff said she would cooperate with Immigration and Customs Enforcement despite state laws prohibiting such activity. More

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      Be clear about what Trump and Musk’s aid axe will do: people will face terror and starve, many will die | Gordon Brown

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      An earthquake of magnitude 7.0 or above could not have caused more carnage. Recent floods in Asia and droughts in Africa have been catastrophic, yet they have inflicted less damage and affected fewer people than the sudden withdrawal of billions of dollars of US aid from the world’s most volatile hotspots and its most vulnerable people. Coming alongside President Trump’s plan for a US takeover of Gaza, the US administration’s resolve to shut down its international aid agency sends a clear message that the era when American leaders valued their soft power is coming to an end.But while the Gaza plan is as yet only on the drawing board, USAid cuts – which will see funding slashed and just 290 of the more than 10,000 employees worldwide retained, according to the New York Times – have already begun to bite this week. We have seen the halting of landmine-clearing work in Asia, support for war veterans and independent media in Ukraine, and assistance for Rohingya refugees on the border of Bangladesh. This week, drug deliveries to fight the current mpox and Ebola outbreaks in Africa have been stopped, life-saving food lies rotting at African ports, and even initiatives targeting trafficking of drugs like fentanyl have been cut back. One of the world’s most respected charities, Brac, says that the 90-day blanket ban on helping vulnerable people is depriving 3.5 million people of vital services.One critical programme has been granted a limited waiver. Pepfar, created by Republican president George W Bush, offers antiretroviral prescriptions to 20 million people around the world to combat HIV and Aids. Its activities escaped the ban only after warnings that a 90-day stoppage could lead to 136,000 babies acquiring HIV. But it has still been blocked from organising cervical cancer screening, treating malaria, tuberculosis and polio, assisting maternal and child health, and efforts to curtail outbreaks of Ebola, Marburg and mpox.Not only does the stop-work edict mean that, in a matter of days, the US has destroyed the work of decades building up goodwill around the world, but Trump’s claim that America has been over-generous is exposed as yet another exaggeration. Norway tops the list as biggest donor of official development assistance (ODA) as a percentage of gross national income (GNI) at 1.09%; Britain is at just over 0.5%, albeit down from the UN target of 0.7%; but the US is near the bottom of the advanced economies at 0.24% – alongside Slovenia and the Czech Republic. It is simply the size of the US economy – 26% of world output – that means that the 0.24% adds up to more aid than any other country. The US provided $66bn in 2023, making USAid a leader in global humanitarian aid, education and health, not least in addressing HIV/Aids, malaria and tuberculosis.On Sunday night, Trump told reporters that USAid had been “run by a bunch of radical lunatics, and we’re getting them out”. “I don’t want my dollars going towards this crap,” his press spokesperson added, with one of the president’s chief advisers Elon Musk calling the agency a “viper’s nest of radical-left marxists who hate America”. “You’ve got to basically get rid of the whole thing. It’s beyond repair,” he said. “We’re shutting it down.”View image in fullscreenIndeed, in a post on X last weekend, Musk shared a screenshot quoting the false claim that “less than 10 percent of our foreign assistance dollars flowing through USAID is actually reaching those communities”. The implication is that the remaining 90% was diverted, stolen, or just wasted. In fact, the 10% figure is the proportion of the budget going directly to NGOs and organisations in the developing world. The remaining 90% is not wasted – instead, it comprises all the goods and services that USAid, American companies and NGOs, and multilateral organisations deliver in kind, from HIV drugs to emergency food aid, malaria bed nets, and treatment for malnutrition. It is simply untrue that 90% of aid falls into the wrong hands and never reaches the most vulnerable.In fact, the initial blanket executive order proved to be such a blunt instrument – the only initial exemptions were for emergency food aid and for military funding for Israel and Egypt – that it had to be modified to include exceptions for what the government called “life-saving humanitarian assistance”, although it stopped short of defining them. “We are rooting out waste. We are blocking woke programs. And we are exposing activities that run contrary to our national interests. None of this would be possible if these programs remained on autopilot,” said a statement released by the state department. The new secretary of state, Marco Rubio, now wants his department to control the whole budget and close down USAid entirely. “Does it make America safer? Does it make America stronger? Does it make America more prosperous?” Rubio asked in a statement that suggested that the America which generally worked multilaterally in a unipolar era is now determined to act unilaterally in a multipolar one.This new stance is not just “America first” but “America first and only” – and a gift to Hamas, IS, the Houthi rebels, and all who wish to show that coexistence with the US is impossible. The shutdown is also good news for China, whose own global development initiative will be strengthened as it positions itself to replace America. Desperate people will turn to extremists who will say that the US can never again be trusted. And by causing misery and by alienating actual and possible allies, far from making America great again, the cancellation of aid will only make America weaker.The tragedy for the planet is that US aid cuts come on top of diminishing aid budgets among the world’s richest economies, from Germany to the UK. International aid agencies are now so underfunded that in 2024, for the second consecutive year, the UN covered less than half of its humanitarian funding goal of nearly $50bn – at a time when increasing conflicts and natural disasters necessitate more relief donor grants than ever. Yes, we can discuss how greater reciprocity can create a fairer system of burden sharing – but further cuts in aid threaten more avoidable deaths, and a poorer world will ultimately make the US poorer too.US generosity is often seen as mere charity, but it is in the country’s self-interest to be generous because the creation of a more stable world benefits us all. We all gain if USAid can mitigate the spread of infectious diseases, prevent malnutrition in the Democratic Republic of the Congo and Sudan, halt the upsurge of IS in Syria and support a fair, humanitarian reconstruction of Gaza and Ukraine. Only the narrowest and most blinkered view of what constitutes “America first” can justify the disaster America has unloaded on the world.

      Gordon Brown is the UN’s special envoy for global education and was UK prime minister from 2007 to 2010 More

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      Government workers sue Trump and Rubio over ‘catastrophic’ USAid cuts

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      The largest US government workers’ union and an association of foreign service workers sued the Trump administration on Thursday in an effort to reverse its aggressive dismantling of the US Agency for International Development.The lawsuit, filed in Washington, DC federal court by the American Federation of Government Employees and the American Foreign Service Association, seeks an order blocking what it says are “unconstitutional and illegal actions” that have created a “global humanitarian crisis”.President Donald Trump, Secretary of State Marco Rubio and Treasury Secretary Scott Bessent are among the named defendants, but the text of the suit focuses extensively on actions, and statements on social media, by Elon Musk and his “department of government efficiency” initiative.“The humanitarian consequences of defendants’ actions have already been catastrophic,” the plaintiffs said. “USAid provides life-saving food, medicine, and support to hundreds of thousands of people across the world. Without agency partners to implement this mission, US-led medical clinics, soup kitchens, refugee assistance programs, and countless other programs shuddered to an immediate halt.”Among the actions called illegal are Trump’s order on 20 January, the day he was inaugurated, pausing all US foreign aid. That was followed by orders from the state department halting USAid projects around the world, agency computer systems going offline and staff abruptly laid off or placed on leave.The White House and the departments did not immediately respond to requests for comment.The gutting of the agency has largely been overseen by Musk, the world’s richest man and a close Trump ally spearheading the president’s effort to shrink the federal bureaucracy and replace career civil servants with politically loyal appointees. On Monday, Musk wrote on X, the social media platform he owns, that he and his employees “spent the weekend feeding USAid into the wood chipper”. That statement was presented to the court as an example of the reckless destruction of an agency created by congressional statute.As the Guardian has reported, Musk has also promoted a campaign of misinformation about the agency’s spending to tarnish its image, even sharing a hoax news report linked to a Russian influence operation that claimed, falsely, more than $40m was paid to Hollywood actors to visit Ukraine. Records from the USAid website that were used to debunk Musk’s false claim that the US planned to spend $50m on condoms for Gaza were removed along with almost the entire web history of the agency.“Not a single one of defendants’ actions to dismantle USAid were taken pursuant to congressional authorization,” the lawsuit said. “And pursuant to federal statute, Congress is the only entity that may lawfully dismantle the agency.”The agency’s website now states that as of midnight on Friday “all USAid direct hire personnel will be placed on administrative leave globally, with the exception of designated personnel responsible for mission-critical functions, core leadership and specially designated programs”.The Trump administration plans to keep fewer than 300 employees, out of more than 10,000, sources told Reuters earlier on Thursday.“The agency’s collapse has had disastrous humanitarian consequences,” Thursday’s lawsuit said, including shutting down efforts to fight malaria and HIV. “Already, 300 babies that would not have had HIV, now do. Thousands of girls and women will die from pregnancy and childbirth.”Samantha Power, a former USAid administrator argued in a New York Times opinion article on Thursday that the damage to American prestige was a boon for its foreign adversaries.“I am not surprised that the attacks are being cheered by Moscow and Beijing,” Power wrote. “They understand what those seeking to dismantle the agency are desperate to hide from the American people: USAid has become America’s superpower in a world defined by threats that cross borders and amid growing strategic competition.”Trump’s foreign aid freeze and the shutdown of USAid have also crippled global efforts to relieve hunger, leaving tons of food worth $340m in limbo.“We already see the shutdown’s cost,” Atul Gawande, a surgeon who led global health programs for USAid wrote on X. “Kids with drug-resistant TB, turned away from clinics, are not just dying – they’re spreading the disease. People around the world [with] HIV, denied their medicine, will soon start transmitting virus. The damage is global.”Gawande added that one one veteran foreign service officer told him: “Our government is attacking us. This is worse than any dictatorship where I’ve worked.”The lawsuit alleges that dissolving USAid, which was established as an independent agency in a 1998 law passed by Congress, is beyond Trump’s authority under the constitution and violates his duty to faithfully execute the nation’s laws.It seeks a temporary and eventually permanent order from the court restoring USAid’s funding, reopening its offices and blocking further orders to dissolve it. More

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      US election commission chair says Trump tried to fire her illegally

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      United States Federal Election Commission commissioner and chair Ellen Weintraub said on Thursday she received a letter from Donald Trump that purports to fire her but added that the action was illegal.In a post on X, Weintraub attached the January 31 letter signed by Trump which said: “You are hereby removed as a member of the Federal Election Commission, effective immediately.”Since taking office last month, Trump, a Republican, has embarked on a massive government makeover, firing and sidelining hundreds of civil servants and top officials at agencies in his first steps toward downsizing the bureaucracy and installing more loyalists.“There’s a legal way to replace FEC commissioners – this isn’t it,” Weintraub, a Democrat, said in her post.“I’ve been lucky to serve the American people and stir up some good trouble along the way. That’s not changing any time soon,” she added.The FEC has more than 300 employees, with six commissioners at the top. The FEC’s vice-chair, James Trainor, is a Republican.Weintraub has served as a commissioner on the FEC since 2002, according to the FEC website. It says she has “served as a consistent voice for meaningful campaign-finance law enforcement and robust disclosure”.FEC commissioners are appointed by the president and confirmed by the Senate.By law, no more than three commissioners can represent the same political party, and at least four votes are required for any official commission action, the FEC website says. More

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      Trump has thrown out the global economic playbook. It’s time for Australia to write its own rules | John Quiggin

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      With the resumption of parliament this week, and an election only months away, we have seen even more of the usual point-scoring about the cost of living, tax breaks for long lunches and budget deficits. But since the return of Donald Trump to the White House, the assumptions on which Australian economic policy have always been based are obsolete.It’s not just the “rules-based international order”, symbolised by the already moribund World Trade Organization, that is gone. Trump is ruling by decree (more politely referred to as “executive order”) and encountering little resistance. Corporations have rushed to buy his favour (or placate his wrath). The US Treasury appears to have been turned over to Elon Musk. No one can predict what will happen here, but a major financial crisis can’t be ruled out.The most immediate threat to Australia arises from Trump’s use of tariffs as a bludgeon to be used in pursuit of vague political demands, or simply as a display of dominance. Trump’s surprising backdown in response to mostly symbolic concessions from Canada and Mexico might be seen as a recognition of the risks of overreach. More likely, however, it reflects a belief that this is a weapon that can be used over and over again, and a desire to fight one enemy at a time (Trump does not believe in friends).For the moment, the tariff fight is with China, and both sides are showing some restraint. As long as this restraint persists, the collateral damage to the Australian economy will be modest. But Trump is prone to acting like a capricious dictator. He could easily take offence at some real or imagined slight and return to the 60% tariffs he promised on the campaign trail.Tariff policy is one of many fronts. Trump has withdrawn the US from the Paris climate agreement, the WHO and international aid programs. Of more immediate consequence for Australia, the US has withdrawn from the OECD agreement on corporate tax minimisation and from attempts to tax the digital economy. Musk and the other tech cronies have already threatened to punish Australia for taxing social media platforms, and for attempts to restrict toxic and violent content.In the long run, this means Australia needs to treat both the US and China as unreliable trading partners who will bully us whenever they see a benefit from doing so. We need to seek a balance between the two and, more importantly, become more self-reliant. In particular, we need to develop our own AI and social media infrastructure, for example by making our own version of DeepSeek and breaking with X and Meta as well as TikTok.In the short run, what’s needed is a recognition that the downside risks to the Australian economy have increased greatly. The government should be preparing plans for fiscal stimulus rather than worrying about public debt. More importantly, the Reserve Bank needs to start cutting rates immediately to guard against recession, even at the price of an incomplete victory over inflation.Above all, we need to ditch the illusion that all this is theatre and that things will go on as before. The US, as we knew it, is gone and won’t be back any time soon. The implications for the global economy, and therefore for Australia, are hard to discern, but they are sure to be profound.

      John Quiggin is a professor at the University of Queensland’s school of economics More