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    The Guardian view on Donald Trump’s tariffs: protectionism is no longer taboo in politics | Editorial

    Donald Trump’s broadside against America’s three largest trading partners, with whom it runs a $500bn trade deficit, should surprise no one. Since 2016, both Mr Trump and Mr Biden have departed from established norms in international trade. The two presidencies diverged significantly in approach: Mr Biden emphasised systemic reform while Mr Trump relied on rhetoric and theatrics. Although both administrations faced criticism for driving up costs through tariffs and industrial policy, global events were primarily behind rising prices.Mr Trump’s self-declared fondness for tariffs is closely tied to his ability to authorise them unilaterally, bypassing Congress under claims of national security. This may explain his recent announcement of plans to impose 25% tariffs on all goods from Canada and Mexico, and an additional 10% on Chinese imports, unless these countries address alleged issues of illegal immigration and fentanyl smuggling. The US president-elect clearly sees tariffs as more than mere policies; they are a calculated means of gaining leverage. By threatening to impose them, Mr Trump is signalling a desire to negotiate – but only on his terms.Mr Trump’s trade tactics reshaped relations with Mexico and Canada, setting the stage for a 2026 review of the 2019 agreement he secured with the US’s neighbours. However, his approach faltered with China. Despite the first Trump administration imposing $112bn in tariffs and threatening to levy $500bn more, Beijing negotiated a 2020 trade deal but did not, after Covid, meet its commitments, leaving Mr Biden to continue the confrontation.Trade involves sacrifices to achieve gains. Cheaper consumer goods might lead to fewer domestic jobs or lower wages in certain industries. Increased imports can mean a reduction in local manufacturing. Running a trade deficit is not necessarily harmful, but it requires an activist policy to ensure that the pain is not geographically concentrated. For decades, the neoliberal economic order championed a vision of a borderless world, where goods and services flowed freely with minimal barriers. This ideal dominated global trade policy and corporate strategy, rendering “protectionism” taboo in mainstream debate. However, since the global financial crash, scepticism about globalisation has steadily grown.An increasing focus on justice, sustainability and better working conditions has reshaped trade priorities worldwide. There has also been a growing shift toward producing goods closer to home, either through increased domestic manufacturing or by developing nearby supply chains. However, wealthy nations, led by the US, have consistently resisted granting poorer countries the flexibility to modernise, while claiming exceptions to rules they enforce on others. During the pandemic, the US prioritised its pharmaceutical industry profits over global vaccine access, blocking life-saving doses for developing countries.Globalisation’s decline began long before Mr Trump, with his protectionist policies reflecting rather than driving this shift. The retreat from globalisation will probably continue, fuelled by geopolitical tensions, post-pandemic supply chain restructuring, and rising demands for equitable trade. Mr Trump’s policies, however, will make an uncertain world even more volatile. His suspicion of win-win deals will make it harder for policymakers around the world who seek to balance their national interests with the need for global cooperation. More

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    Mexico president vows to retaliate with own tariffs against Trump’s tax threat

    Mexico’s president, Claudia Sheinbaum, has rebuked Donald Trump’s threat to impose steep tariffs on Mexico, arguing the plan would do nothing to halt the flow of migrants or drugs bound for the US border, and vowing that Mexico would hit back with tariffs of its own.“One tariff would be followed by another in response, and so on until we put at risk common businesses,” Sheinbaum said, warning that tariffs would cause inflation and job losses in both countries. “What sense is there?”Sheinbaum’s comments came after Trump said on Monday that, as one of his first actions as president, he would impose a 25% tax on all imports from Mexico and Canada in an effort to stop the flow of migrants and narcotics into the United States.“This Tariff will remain in effect until such time as Drugs, in particular Fentanyl, and all Illegal Aliens stop this Invasion of our Country!” Trump wrote on his Truth Social page.It is unclear if the president-elect’s proposal would even be legal or possible, given that the three countries share a free trade agreement known as the USMCA that was negotiated during his previous term in the White House.But as analysts pointed out, Trump has never been one to abide by the rules.“Did we really think that Trump was going to become more institutional or more formal?” said Valeria Moy, a Mexican economist and director general of IMCO, a public policy analysis firm. “The Trump that the United States and the world will have, at least in the signs he’s given, is a Trump that will be more dictatorial, tougher, more emboldened.”Even if they are legally questionable, the tariffs could provide Trump with a quick win upon taking office in January, said Viri Ríos, a Mexican public policy expert.“I don’t rule out that he would implement them temporarily to give a result to his electoral base, which would be happy to see that Donald Trump is being consistent with his campaign promises,” she said. “But from that to this being a long term strategy, it seems to me that it would not be good for the United States itself.”Mexico is the United States’s top trade partner as of September, representing 15.8% of total trade. According to Ríos, a 25% tariff on Mexican goods would cost the US economy $125bn over 10 years, while costing its GDP between 0.5 and 0.74%.With such steep tariffs, US companies importing Mexican goods would undoubtedly have to raise their prices.“The main victim will be the American consumer, because at the end of the day, tariffs are more or less reflected in prices,” said Moy.That could end up costing Trump politically, given the role consumer prices played in his election win.“One of the main reasons why Trump’s campaign was successful, was that people felt that inflation had increased during Biden’s last term,” said Ríos. “So I think he’s playing with fire.”Analysts also questioned whether Trump’s plan would even have its desired impact, given that the flow of drugs to the US is driven by American demand, not by the flow of goods.“It’s a bit like scapegoating,” said Ríos. “The key to this problem isn’t in Mexico, it’s in the United States.”Ultimately, analysts viewed Trump’s proposal as a threat to force Mexico on to the negotiating table and implement policies on migration and security that could have some meaningful impact on the flow of drugs and migrants to the United States.“We’ve already seen this [from Trump] – first you threaten, then you negotiate,” said Moy. “He’s using it as a threat to sit down and negotiate and say ‘Ok, you, president of Mexico … What are you going to do to contain the flow of migrants and what are you going to do in terms of security? What are you going to do to prevent fentanyl from passing from Mexico to the United States? And if you don’t do it, I’ll put tariffs on you.’” More

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    Trump’s tariff threat sets stage for bitter global trade war

    Donald Trump’s threat to impose steep tariffs on goods imported into the US has set the stage for a bitter global trade war, according to trade experts and economists, with consumers and companies warned to brace for steep costs.The president-elect announced on Monday night that he intended to hit Canada, Mexico and China with tariffs on all their exports to the US – until they reduce migration and the flow of drugs into the country.As officials in the three countries scrambled to respond, Keith Rockwell, a former director at the World Trade Organization, predicted that Trump’s move could spark a trade war. “The United States exports hundreds of billions of dollars worth of goods to these countries,” he said. “Anyone who expects that they will stand pat and not retaliate has not been paying attention.”China promptly suggested that both sides would lose from an escalation in economic tensions. “No one will win a trade war or a tariff war,” Liu Pengyu, a spokesperson at the Chinese embassy in Washington, wrote on X, formerly Twitter. Chrystia Freeland, Canada’s deputy prime minister, and Dominic LeBlanc, its public safety minister, touted the country’s “balanced and mutually beneficial” economic ties with the US.Hours after Trump issued the announcements on Truth Social, his social media platform, economists at ING released research that estimated his broader campaign proposals on trade – including a universal tariff of between 10% and 20% on all goods imported from overseas, and a 60% tariff on all goods from China – could cost each US consumer up to $2,400 each year.“This potential increase in consumer costs and inflation could have widespread economic implications, particularly in an economy where consumer spending accounts for 70% of all activity,” James Knightley of ING said.It is unclear whether Trump, who has described “tariff” as “the most beautiful word in the dictionary”, will follow through on this plan. Tariffs – levies paid for by the company importing foreign goods – are not popular with voters, even Trump’s voters. A Harris poll conducted for the Guardian found 69% of people believe they will increase the prices they pay.And while he threatened universal tariffs while campaigning for the White House, this proposal – a 25% duty on all goods from Mexico and Canada, and a 10% duty on China, on top of existing duties – is more targeted.“Trump’s statements clearly herald the dawn of a new era of US trade protectionism that will sweep many US trading partners into its ambit,” said Eswar Prasad, former head of the IMF’s China division. “Such tariffs will have a disruptive effect on US as well as international trade, as countries around the world jockey to soften the blow of US tariffs on their own economies and try to find ways to evade the tariffs.”On the campaign trail, Trump and his allies claimed such measures would help strengthen the US economy and “make America wealthy again”. Many economists took a different view, warning that sweeping tariffs would increase the price of goods for US consumers, and risk prompting other nations to retaliate, hitting US businesses exporting goods to the world.But in his announcements on Tuesday, Trump did not focus on the economic benefits has claimed tariffs would bring. Instead, he blamed Mexico and Canada for “ridiculous Open Borders” he alleged were prompting an immigration crisis, and China for “the massive amounts of drugs, in particular Fentanyl” arriving in the US – and pledged to impose tariffs on these countries until they addressed his concerns.“Trump apparently sees tariffs as a tool with broad uses in tackling a variety of malign external factors that have adverse effects on the US economy, society and national security,” noted Prasad, now a professor of trade policy at Cornell University.skip past newsletter promotionafter newsletter promotionThe billionaire hedge fund manager Bill Ackman, who endorsed Trump, wrote on X that the president-elect “is going to use tariffs as a weapon to achieve economic and political outcomes which are in the best interest of America”, in a bid to deliver on his “America First” policy strategy.Making such announcements on social media “is a great way for Trump to effect foreign policy changes even before he takes office”, Ackman claimed.As Trump builds out his broader trade strategy, Rockwell, formerly of the WTO, said a 10% universal tariff would me “more manageable” than 20%. “But if you raise it 20%, that creates a different dynamic,” he said. “You’re going to see much, much less demand for these products coming in.“There will also be, without any doubt, retaliation,” he added. European officials “have got their list drawn up”, he said. “It’s the most closely guarded secret in Brussels, but it’s drawn up.”Countries will hit back with tariffs on “political pinch points”, Rockwell predicted. Under the last Trump administration, the European Union targeted US exports including Harley-Davidson bikes, Levi’s jeans and Kentucky bourbon. More

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    Biden proposes Medicare and Medicaid cover weight-loss drugs for 7.4m people

    The Biden administration is proposing to make “miracle” weight loss drugs free for low-income people and retirees, in a move aimed at tackling America’s chronic obesity problem but which throws down a gauntlet to the incoming president, Donald Trump.The proposal, unveiled on Tuesday, would see expensive drugs such as Ozempic, Wegovy and Zepbound covered by Medicaid and Medicare, the federal government programs for the poor and the elderly.It would come at a hefty cost to the public purse. The drugs would be covered for anyone qualifying as obese, a definition that currently fits 40% of the US population. Currently, coverage is only given when patients have other conditions that is caused by obesity, such as diabetes, heart disease and cancer.Xavier Becerra, the US health and human services secretary, called the move a “game changer”.“It helps us recognize that obesity is with us,” he told the Washington Post. “It’s severe. It’s damaging our country’s health. It’s damaging our economy.”But the proposed reform amounted to a challenge to Trump’s incoming administration, which would have to decide whether to implement the change a few days after taking office in January. Trump has sworn to slash the federal budget.It also paved the way for a likely conflict between two of Trump’s health sector nominees: Robert F Kennedy Jr, who has been proposed as the health and human services secretary, and Mehmet Oz, the celebrity physician who has been nominated to run Medicare and Medicaid.Kennedy has vowed to promote healthy eating and improve fitness in the battle against obesity, and has fiercely criticised weight loss drugs, blaming them for obscuring the causes of ill health.He recently claimed to Fox News that covering a drug like Ozempic for every overweight American would cost $3tn a year.“If we spend about one-fifth of that, giving good food, three meals a day, to every man, woman and child in our country, we could solve the obesity and diabetes epidemic overnight for a tiny fraction of the cost,” he said.“There’s a huge push to sell this to the American public. They’re counting on selling to Americans because we’re so stupid and so addicted to drugs.”Oz has taken a different tack, praising Ozempic on social media last year. “[F]or those who want to lose a few pounds, Ozempic and other semaglutide medications can be a big help,” he wrote. “We need to make it as easy as possible for people to meet their health goals, period.”Beccera estimated that 3.4 million people on Medicare and 4 million on Medicaid would become eligible for the drugs under the new rule.But other research suggests that far more people may qualify. The Centers for Medicare and Medicaid Services (CMS), the agency Oz has been nominated to head, has estimated that 28 million recipients suffer from obesity.A recent Congressional Budget Office analysis estimated that federal spending would rise by $35bn between 2026 and 2034 by allowing Medicare alone to cover weight-loss medications.People can lose between 15% and 25% of their body weight thanks to the drugs, which imitate the hormones that regulate appetites. A month’s supply can cost around $1,000. More

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    The Democrats’ next campaign should appeal to their base, not swing voters | Steve Phillips

    Many people are drawing the wrong conclusions about what happened in the 2024 election. The conventional wisdom is that large swaths of population groups shifted their political allegiances to Donald Trump, propelling him to victory over Kamala Harris.A more careful reading of the data, however, shows that those conclusions are inaccurate, and the biggest problem for Democrats was a failure to turn out Democratic voters. Coming to terms with the unfounded faith in voter persuasion – at the extent of tried and true voter turnout programs – will have profound implications for the future of the Democratic party and the country.The cause of the confusion is the fact that Trump won dozens of counties across the country that voted for Joe Biden in 2020. Seeing that the Democratic margin had shrunk or evaporated in these places, most in the media rushed to report a massive national shift to the right, replete with graphics showing maps with red arrows pointing rightward.Looking more closely at the results and comparing them to the data from the 2020 election, one can see that while the counties did swing, the voters, for the most part, did not. What leaps out from a careful comparison is the finding that Democratic voter turnout fell through the floor. Trump didn’t win those counties because people switched their votes to him; he won because significant numbers of people who voted for Biden in 2020 did not vote at all in 2024.The decline in voter turnout is first visible from the simple fact that the total number of votes cast in 2024 is smaller than the number cast in 2020 (153m in 2024 versus 155m in 2020). This is despite the fact that the size of the US population has increased by 4.5 million people since the last election.It is when one takes a closer look at the underlying data that the picture comes into sharper focus. In nearly a third of the top 50 counties that flipped from Democrat to Republican, Trump’s vote actually declined from his 2020 numbers. If Democratic voters are coming over to the Republican ranks, their vote total should go up, not down. In Pinellas county, Florida, for example, Trump got nearly 7,000 fewer votes than in 2020, but the Democratic vote total plummeted by 35,000 votes.This pattern is evident in nearly all of the counties that flipped. Even in the counties where Trump’s vote increased marginally over 2020, that increase was generally dwarfed by the Democratic decline. In Erie county in the critical swing state of Pennsylvania, Trump improved on his 2020 showing by 801 votes, but the votes for Harris dropped by 2,618 votes, more than enough to have carried the county had those voters cast ballots.Just as is the case in medicine, an effective treatment requires an accurate diagnosis. The anemic Democratic voter turnout is the result of a cataclysmic failure of theory of change, strategy and spending, most notably by the Democratic Super Pac Future Forward.Super Pacs have great freedom and flexibility in that there are no limits on the size of contributions they can receive and few restrictions on their electoral activities. I helped create one of the country’s first such committees, Vote Hope, in 2007 to help Barack Obama, and our theory of change was that boosting Black voter turnout would help elect the country’s first Black president. Accordingly, we spent our money on hiring canvassers to knock on doors and buses to drive voters to the polls.Future Forward embraced the view that they could devise clever television and digital ads that would persuade Trump-leaning voters to back the Democrats. Accordingly, they poured nearly $700m into an advertising avalanche that was redundant to Harris’s ads and obviously ineffective. In a fawning New York Times profile, their effort was described as “animated by the idea that a blend of data science, political science and testing can usher in a new era of rigor in advertising”.There were seven battleground states where the parties concentrated their time, energy, and resources. Imagine if Future Forward had spent $100m in each state, hiring canvassers, investing in community-based civic engagement organizations, and funding the labor-intensive and expensive yet effective work of getting out the vote. Such a program would have boosted voter turnout, bringing back out the coalition that defeated Trump in 2020.A failure of this magnitude demands soul-searching and brutal re-assessment of prior assumptions and strategies. The work of defending and ultimately taking back the country starts now, and a sober assessment of the election results makes clear that 2024 marks the requiem for the widely held but thinly supported view that it makes more sense to invest in persuasion over the power-building program of getting out the vote.

    Steve Phillips is the founder of Democracy in Color, and author of Brown Is the New White: How the Demographic Revolution Has Created a New American Majority and How We Win the Civil War: Securing a Multiracial Democracy and Ending White Supremacy for Good More

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    Trump’s cabinet isn’t as anti-Wall Street as voters might want to believe | Robert Reich

    Will anything stop Trump?He’s got control over both chambers of Congress, a tractable supreme court, a political base of fiercely loyal Magas, a media ecosystem that amplifies his lies (now including Musk’s horrific X as well as Rupert Murdoch’s reliably mendacious Fox News) and a thin majority of voters in the 2024 election.He doesn’t worry about another election because he won’t be eligible to run again (or he’ll ignore the constitution and stay on).Of course, there are the midterm elections of 2026. But even if Democrats take back both chambers, Trump and his incipient administration are aiming to wreak so much damage on America in the meantime that Democrats can’t remedy it.The Republican-controlled Senate starting 3 January won’t restrain Trump. Yes, Trump overreached with his pick of Matt Gaetz for attorney general. Apparently even Senate Republicans can’t abide alleged sex trafficking of girls for drug-infested sex parties, but this is a very low bar. (Gaetz denies any wrongdoing.)So, as a practical matter, is anything stopping Trump?Yes, and here’s a hint of what it is: on Friday, Trump picked Scott Bessent to serve as US secretary of the treasury.Bessent is the man Elon Musk derided only a week ago as the “business-as-usual choice” for treasury secretary, in contrast to Howard Lutnick, whom Musk said would “actually enact change”.Musk’s view of “change” is to blow a place up, which was what Musk did when he bought Twitter.Over the last two weeks, Musk has convinced Trump to appoint bomb-throwers Robert F Kennedy Jr to health and human services and Pete Hegseth to defense and to put Musk and Vivek Ramaswamy in charge of cutting $2tn from the federal budget.But Bessent is the opposite of a bomb-thrower. He’s a billionaire hedge fund manager, founder of the investment firm Key Square Capital Management, and a protege of the Maga arch-villain George Soros. (He’s also gay, which the Maga base may not like, either.)Why did Trump appoint the “business-as-usual” Bessent to be treasury secretary? Because the treasury secretary is the most important economic job in the US government.Trump has never understood much about economics, but he knows two things: that high interest rates can throttle an economy (and bring down a president’s party) and that high stock prices are good (at least for Trump and his investor class).Trump doesn’t want to do anything that will cause bond traders to raise long-term interest rates out of fear of future inflation and he wants stock traders to be so optimistic about corporate profits they raise share prices.So he has appointed a treasury secretary who will reassure the bond and stock markets.Stock and bond markets constitute the only real constraint on Trump – the only things whose power he’s afraid of.skip past newsletter promotionafter newsletter promotionBut wait. What about Trump’s plan to raise tariffs? He has floated a blanket tariff of 10% to 20% on nearly all imports, 25% on imports from Mexico, and 60% or more on Chinese goods.Tariffs of this size would increase consumer prices and fuel inflation – driving interest rates upward. (The cost of tariffs are borne by American businesses and households, rather than foreign companies.)Tariffs could also invite retaliation from foreign governments and thereby dry up export markets for American-based corporations – in which case the stock market would tank. (The last time America raised tariffs on all imports – Herbert Hoover’s and congressmen Smoot and Hawley’s Tariff Act of 1930 – the Great Depression worsened.)In short, tariffs will rattle stock and bond markets, doing the exact opposite of what Trump wants.So Trump has appointed a treasury secretary who will soothe Wall Street’s nerves – not just because Bessent is a Wall Street billionaire who speaks its language but also because Wall Street doesn’t really believe Bessent wants higher tariffs.Bessent has described Trump’s plan for blanket tariffs as a “maximalist” negotiating strategy – suggesting Trump’s whole tariff proposal is a strategic bluff. Wall Street apparently thinks tariffs won’t rise much when other countries respond to the bluff with what Trump sees as concessions.Instead, Wall Street expects Bessent to be spending his energies seeking lower taxes, especially for big corporations and wealthy Americans, and helping Musk and Ramaswamy cut spending and roll back regulations.It’s a sad commentary on the state of American democracy when the main constraint on the madman soon to occupy the Oval Office is Wall Street.I suppose we should be grateful there’s any constraint at all.

    Robert Reich, a former US secretary of labor, is a professor of public policy at the University of California, Berkeley, and the author of Saving Capitalism: For the Many, Not the Few and The Common Good. His newest book, The System: Who Rigged It, How We Fix It, is out now. He is a Guardian US columnist. His newsletter is at robertreich.substack.com More

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    Trump camp rivalries come to fore over efforts to oust top adviser

    Internal rivalries spilled into public view on Monday as Boris Epshteyn, a top adviser to Donald Trump, found himself at the center of an ouster effort over accusations he asked potential administration nominees to pay monthly consulting fees in exchange for lobbying for them to the president-elect.The maelstrom engulfing Epshteyn suggested that barely 20 days since Trump won the election, the knife-fight culture of the first Trump presidency, where bitter aides took any opportunity to remove rivals, had returned.Over the weekend, David Warrington, the Trump 2024 campaign’s general counsel, finalized the main conclusions of a review into Epshteyn that found he had unsuccessfully solicited tens of thousands of dollars from potential nominees including Scott Bessent, who has been tapped to be Treasury secretary.According to the review, one day after Trump met with Bessent for the first time in February, Epshteyn invited him to lunch at a hotel in Palm Beach, where he asked for a monthly retainer of at least $30,000 to promote his name at Mar-a-Lago in case Trump won the election.Bessent declined and complained to an aide that Epshteyn tried to shake him down. Later, when Epshteyn asked Bessent to invest $10m in a three-by-three basketball league, he declined but told associates Epshteyn would probably give him better access if he had taken up the offer.The review into Epshteyn, a longtime Trump adviser who has wielded outsized influence with Trump over cabinet picks and positions in key departments, also concluded Epshteyn’s employment and access to Trump should be terminated, according to two people briefed on the findings.But Epshteyn remained part of Trump’s inner circle as of Monday evening, with Trump riding high on the news that special counsel prosecutors had moved to dismiss the two federal criminal cases against him – a victory he credited to Ephsteyn.The first person that Trump called when prosecutors withdrew the cases against him was Epshteyn, according to two people with Trump at the time, which occurred just as CNN first reported the existence of the review into Epshteyn’s consultancy scheme.For the remainder of the day, Epshteyn was on the offensive as his allies dismissed the review as an attempt by Warrington to decapitate Epshteyn after he successfully pushed for Bill McGinley to be the White House counsel, rather than Warrington, who had also been in contention for the role.Epshteyn’s allies later portrayed the review as a political hit job capitalizing on Epshteyn’s role in pushing for the former congressman Matt Gaetz to get the nomination for attorney general before it sank under the weight of sexual misconduct allegations.Epshteyn denied the allegations. “I am honored to work for President Trump and with his team,” he said in a statement. “These fake claims are false and defamatory and will not distract us from making America great again.”If the failure of the Gaetz nomination was seen as an opportunity to oust Epshteyn, even in part, it may have been a miscalculation since the original idea to have Gaetz lead the justice department came from Trump himself, according to a person with direct knowledge of that conversation.One Trump adviser who does not care for Epshteyn speculated on Monday night that his influence was weakened by the allegations. But another Trump adviser suggested Epshteyn may have emerged stronger. “Trump isn’t impressed by a pile-on because that’s what all those prosecutors did to him,” the adviser said.Epshteyn’s staying power with Trump has remained constant over the years and surprised newcomers to Trump’s orbit. Elon Musk, the world’s richest man, and former Fox News host Tucker Carlson have both remarked to associates that they did not understand why Trump placed so much trust in Epshteyn.The principal reason for that trust in the last two years, according to multiple aides and associates, has been because Trump has regarded him as a major reason for how he sidestepped legal peril during the 2024 campaign.Epshteyn assembled and oversaw the Trump legal team during the criminal investigations and in the multiple criminal cases, including when Trump found it nearly impossible to find capable lawyers to represent him. “Boris was always right,” Trump is said to have remarked about Epshteyn’s legal strategy.That endeared him to Trump, who has taken Epshteyn seriously on policy and personnel suggestions, even if they were derided by others on the Trump team. When Trump named his top picks for the leadership of the justice department, they were Trump’s personal lawyers who had all been recruited by Epshteyn. More