World news

Subterms

    More stories

    • 200 Shares80 Views

      in US Politics

      China raises tariffs on US goods to 125% as Xi urges EU to resist Trump ‘bullying’

      by

      China has raised its tariffs on US products to 125% in the latest salvo of the trade dispute with Washington, just hours after Xi Jinping said there were “no winners in a tariff war”.Xi made the comments during a meeting with the Spanish prime minister in which he invited the EU to work with China to resist “bullying”, part of an apparent campaign to shore up other trading partners.The Chinese commerce ministry announced on Friday that it was raising the 84% tariffs on all US imports to 125%, again saying that China was ready to “fight to the end”. The statement also suggested it may be Beijing’s last move in the tit-for-tat tariff raises as “at the current tariff level, there is no market acceptance for US goods exported to China”.“If the US continues to impose tariffs on Chinese goods exported to the US, China will ignore it,” it said, flagging that there were other countermeasures to come.Some markets continued to tumble on Friday, as the French president, Emmanuel Macron, described the US president’s 90-day tariff pause – which sets most tariffs at 10% until July – as “fragile”.Asian indices followed Wall Street lower on Friday, with Japan’s Nikkei down nearly 5% and Hong Kong stocks heading towards the biggest weekly decline since 2008. Oil prices were also expected to drop for a second consecutive week.Chinese officials have been canvassing other trading partners about how to deal with the US tariffs, after the country was excluded from Trump’s 90-day pause of the steepest global tariffs. Instead the US president made consecutive increases to duties on Chinese imports, which are now 145%.On Friday, Xi welcomed Spain’s Pedro Sánchez, after also talking to counterparts in Saudi Arabia and South Africa. According to the official Chinese summary of the talks, Xi said “there will be no winners in a tariff war, and going against the world will isolate oneself”, in an apparent reference to the US.“China and the EU should fulfil their international responsibilities, jointly maintain the trend of economic globalisation and the international trade environment, and jointly resist unilateral bullying, not only to safeguard their own legitimate rights and interests, but also to safeguard international fairness and justice, and to safeguard international rules and order,” the summary said Xi told Sánchez.Spain said Sánchez told Xi his country favoured a more balanced relationship between the EU and China based on negotiations to resolve differences and cooperation in areas of common interest.Xi plans to travel to south-east Asia, including Vietnam and Cambodia, next week.Macron wrote on X early on Friday that Trump’s partial tariff suspension, pausing new rates on various countries that would have risen as high as 50%, “sends out a signal and leaves the door open for talks. But this pause is a fragile one.”He added: “This 90-day pause means 90 days of uncertainty for all our businesses, on both sides of the Atlantic and beyond.”Battered financial markets were given a brief reprieve on Wednesday when Trump decided to pause duties on dozens of countries. However, his escalating trade dispute with China, the world’s second-largest economy, has continued to fuel fears of recession and further retaliation.The US treasury secretary, Scott Bessent, tried to assuage the fears of sceptics by telling a cabinet meeting on Thursday that more than 75 countries wanted to start trade negotiations, and Trump had expressed hope of a deal with China.But the uncertainty in the meantime extended some of the most volatile trading since the early days of the Covid-19 pandemic.The US’s S&P 500 index ended 3.5% lower on Thursday and was now down about 15% from its all-time peak in February. Some analysts believe stocks have further to fall owing to the uncertainty surrounding the US tariff policy.Bessent shrugged off the renewed market sell-off on Thursday and predicted that striking deals with other countries would bring more certainty.The US and Vietnam agreed to begin formal trade talks after Bessent spoke to the Vietnamese deputy prime minister, Ho Duc Phoc, the White House said.The south-east Asian manufacturing hub is prepared to crack down on Chinese goods being shipped to the US via its territory in the hope of avoiding tariffs, Reuters reported on Friday.Taiwan’s president said his government would also be among the first batch of trading partners to enter negotiations. Taiwan, listed for a 32% tariff, has offered zero tariffs as a basis for talks.Japan’s prime minister, Shigeru Ishiba, meanwhile, has set up a taskforce led by his close aide that hopes to visit Washington next week, according to local media.View image in fullscreenWhile Trump suddenly paused his “reciprocal” tariffs on other countries hours after they came into effect this week, he did not include China, instead increasing duties on Chinese imports as punishment for Beijing’s initial move to retaliate.Trump had imposed tariffs on Chinese goods of 145% since taking office, a White House official said.Meanwhile, Trump told reporters at the White House he thought the US could make a deal with China, but he reiterated his argument that Beijing had “really taken advantage” of the US for a long time.“I’m sure that we’ll be able to get along very well,” the US president said, referring to Xi. “In a true sense, he’s been a friend of mine for a long period of time, and I think that we’ll end up working out something that’s very good for both countries.”Xi and Trump are not known to have spoken since before Trump’s inauguration. Beijing has said it has no intention of backing down to what it terms as Trump’s “bullying” with the tariffs.“We will never sit idly by and watch while the legitimate rights and interests of the Chinese people are infringed, nor will we sit idly by as international economic and trade rules and the multilateral trading system are undermined,” the Chinese foreign ministry spokesperson, Lin Jian, said on Thursday.As well as retaliatory tariffs, Beijing has also restricted imports of Hollywood films, and put 18 US companies on trade restriction lists.The commerce ministry said China’s door was open to dialogue but this must be based on mutual respect.The US tariff pause also does not apply to duties paid by Canada and Mexico, whose goods are still subject to 25% fentanyl-related tariffs unless they comply with the US-Mexico-Canada trade agreement’s rules of origin.With trade hostilities persisting among the top three US trade partners, Goldman Sachs estimates the probability of a recession at 45%.Even with the rollback, the overall average import duty rate imposed by the US is the highest in more than a century, according to Yale University researchers.It also did little to soothe business leaders’ worries about the fallout from Trump’s trade dispute and its chaotic implementation: soaring costs, falling orders and snarled supply chains.One reprieve came, however, when the EU said it would pause its first counter-tariffs. More

    • 125 Shares96 Views

      in US Politics

      Will global climate action be a casualty of Trump’s tariffs?

      by

      Donald Trump’s upending of the global economy has raised fears that climate action could emerge as a casualty of the trade war.In the week that has followed “liberation day”, economic experts have warned that the swathe of tariffs could trigger a global economic recession, with far-reaching consequences for investors – including those behind the green energy projects needed to meet climate goals.Fears of a prolonged global recession have also tanked oil and gas prices, making it cheaper to pollute and more difficult to justify investment in clean alternatives such as electric vehicles and low-carbon heating to financially hard-hit households.But chief among the concerns is Trump’s decision to level his most aggressive trade tariffs against China – the world’s largest manufacturer of clean energy technologies – which threatens to throttle green investment in the US, the world’s second-largest carbon-emitter.‘A tragedy for the US’The US is expected to lag farther behind the rest of the world in developing clean power technologies by cutting off its access to cheap, clean energy tech developed in China. This is a fresh blow to green energy developers in the US, still reeling from the Trump administration’s vow to roll back the Biden era’s green incentives.Leslie Abrahams, a deputy director at the Center for Strategic and International Studies (CSIS) in Washington DC, said the tariffs would probably hinder the rollout of clean energy in the US and push the country to the margins of the global market.Specifically, they are expected to drive up the price of developing clean power, because to date the US has been heavily reliant on importing clean power technologies. “And not just imports of the final goods. Even the manufacturing that we do in the United States relies on imported components,” she said.The US government’s goal to develop its manufacturing base by opening new factories could make these components available domestically, but it is likely to take time. It will also come at considerable cost, because the materials typically imported to build these factories – cement, steel, aluminium – will be subject to tariffs too, Abrahams said.“At the same time there are broader, global economic implications that might make it difficult to access inexpensive capital to build,” she added. Investors who had previously shown an interest in the US under the green-friendly Biden administration are likely to balk at the aggressively anti-green messages from the White House.Abrahams said this would mean a weaker appetite for investment in rolling out green projects across the US, and in the research and development of early-stage clean technologies of the future. This is likely to have long-term implications for the US position in the global green energy market, meaning it will “cede some of our potential market share abroad”, Abrahams added.Instead, countries like China are likely to divert sales of their clean energy tech away from the US to other countries eager to develop green energy, Abrahams said. “So on the one hand, that should help to accelerate adoption of clean energy in those countries, which is good for emissions, but for the US, that is future market share that we’re ceding,” she said.‘Clean energy is unstoppable, with or without Trump’It’s important to distinguish between the US and the rest of the world, according to Kingsmill Bond, a strategist for the energy thinktank Ember.“The more the US cuts itself off from the rest of the world, the more the rest of the world will get on with things and the US will be left behind. This is a tragedy for the clean energy industry in the US, but for everyone else there are opportunities,” he said.Analysis by the climate campaign group 350.org has found that despite rising costs and falling green investment in the US, Trump’s trade war will not affect the energy transition and renewables trade globally.It said the US was already “merely a footnote, not a global player” in the race to end the use of fossil fuels. Only 4% of China’s clean tech exports go to the US, it said, in a trade sector where sales volume grew by about 30% last year.“Trump’s tariffs won’t slow the global energy transition – they’ll only hurt ordinary people, particularly Americans,” said Andreas Sieber, an associate director at 350.org. “The transition to renewables is unstoppable, with or without him. His latest move does little to impact the booming clean energy market but will isolate the US and drive up costs for American consumers.”View image in fullscreenOne senior executive at a big European renewable energy company said developers were likely to press on with existing US projects but in future would probablyinvest in other markets.“So we won’t be doing less, we’ll just be going somewhere else,” said the executive, who asked not to be named. “There is no shortage of demand for clean energy projects globally, so we’re not scaling back our ambitions. And excluding the US could make stretched supply chains easier to manage.”Countries likely to benefit from the fresh attention of renewable energy investors include burgeoning markets in south-east Asia, where fossil fuel reliance remains high and demand for energy is rocketing. Australia and Brazil have also emerged as countries that stand to gain.“In times like these, countries will be increasingly on the hunt for domestic solutions,” Bond said. “And that means clean energy and local supply chains. There are always climate reasons to go green, but there are national security reasons now too.”The challenge for governments hoping to seize the opportunity provided by the US green retreat will be to assure rattled investors that they offer a safe place to invest in the climate agenda.Dhara Vyas, the chief executive of Energy UK, the UK industry’s trade body, said: “Certainty has always been the thing that investors say they need. The UK is seen as a stable country with a stable government, but now more than ever we need to double down on giving certainty to investors.”“Investors do like certainty,” Bond agreed. “But they also like growth and opportunity, so that’s why there is some confidence that they will continue to deploy capital in the sector.”‘The US still matters’Although the green investment slowdown may be largely limited to the US, this still poses concerns for global climate progress, according to Marina Domingues, the head of new energies for the consultancy Rystad Energy.“The US is a huge emitter country. So everything the US does still really matters to the global energy transition and how we account for CO2,” she said. The US is the second most polluting country in the world, behind China, which produces almost three times its carbon emissions. But the US’s green retreat comes at a time when the country was planning to substantially increase its domestic energy demand.After years of relatively steady energy demand, Rystad predicts a 10% growth in US electricity consumption from a boom in AI datacentres alone. The economy is also likely to require more energy to power an increase in domestic manufacturing as imports from China dwindle.In the absence of a growing energy industry, this is likely to come from fossil fuels, meaning growing climate emissions. The US is expected to make use of its abundance of shale gas, but it is planning to use more coal in the future too.In the same week that Trump set out his tariffs, he signed four executive orders aimed at preventing the US from phasing out coal, in what climate campaigners at 350.org described as an “abuse of power”.Anne Jellema, the group’s executive director, said: “President Trump’s latest attempt to force-feed coal to the US is a dangerous fantasy that endangers our health, our economy and our future.” More

    • 163 Shares85 Views

      in US Politics

      The big lesson for Europe? Trump backed down under pressure | Alexander Hurst

      by

      My condolences to everyone who spent days trying to play 5D chess with Donald Trump’s market-exploding tariff mess. Where Trump is involved, there is a cloud of malevolent chaos, and there is grift amid the chaos. What grandmasters there are to be found are almost certainly grandmasters of grift.When markets dump $10tn in three days and then gain trillions back in a single afternoon on the erratic decisions of one deeply corrupt person, you can be sure that a small number of people have made immense sums of money out of that volatility. Were the people responsible for abnormal spikes of buying into the markets (including call options on various indexes and exchange-traded funds) on Wednesday morning – and again, 20 minutes before the tariff announcement went public – extraordinarily lucky? Were they in the right Signal group? Or were they just simply following Trump on Truth Social, where he posted: “THIS IS A GREAT TIME TO BUY!!! DJT” –just a few hours before dropping the news that he was kind of pulling back.The first takeaway for the EU – beyond the potential stock tips – is that Trump will back down under pressure. So don’t grovel: the 10% universal tariff is still there, as are last month’s tariffs on steel and aluminum, so why has the EU unilaterally stepped down its retaliatory tariffs without a corresponding step-down from the US?Trump, of course, is spinning his partial U-turn as a result of “these countries … calling me, kissing my ass”, as he bragged to a gathering of congressional Republicans on Tuesday night. I have no doubt that Trump – whom hundreds of mental health professionals have described as having such a striking and serious case of malignant narcissism that they were willing to break a professional rule and diagnose him from a distance – would have loved for that to be true. But let me go out on a limb and say that it wasn’t the ass-kissing or any “deals”. It was that investors and funds the world over were fleeing anything and everything linked to the US – including its sovereign debt.There is a longstanding phenomenon whereby Europe tends to overvalue the US’s power and underestimate its own. Europe neither “kissed ass” nor retaliated over the “liberation day” tariffs; it observed as the market carnage and threat to US Treasury bonds punched a hole in the idea of the US as impregnable. Imagine how much faster the flood away from the US and to safety elsewhere (including the euro) would have been if the EU hadimmediately used its so-called bazooka, the anti-coercion instrument – a powerful new regulation that would allow it to target US services industries such as banking and tech.The second takeaway is that the rest of the world is ready to bypass the US’s chaos and unpredictability – it just needs Europe to be the alternative. What Trump also does not understand is that the US may have a trade deficit, but it was a net exporter of trust – until it blew up an interlocking economic and security order that it had designed, built and maintained over eight decades – and of which it was the primary beneficiary. As a result, the view from Brussels now is that “there is no long-term credibility” with the US, Claus Vistesen, of Pantheon Macroeconomics, told me.Europe, on the other hand, plays by the rules. In the long run the more dents Trump pounds into the rule of law and the idea that the US is stable, rather than erratic, the stronger the euro’s argument for replacing the dollar as the world’s reserve currency. Which brings me to the third takeaway.In the face of the Trump administration’s very real animosity towards it, the EU must act as swiftly as possible to shore up its greatest weakness: its dependence on fossil-fuel imports. Sometimes, the animosity is almost laughably tragicomic, such as when US commerce secretary Howard Lutnick ranted that Europeans “hate our beef because our beef is beautiful and theirs is weak”. Other times, it’s more transparent, such as when Trump claimed there would be no negotiations unless the Europeans “pay us a lot of money on a yearly basis, number one for present, but also for past”. As in, in Trump’s mind, $350bn in annual purchases of US natural gas in exchange for lifting tariffs.Over the past few months, the refrain that governments should weaken climate regulation in order to promote growth has picked up. This would be a truly pyrrhic victory – primarily because Europe is acutely vulnerable to climate breakdown, the human and financial costs of which are staggeringly worse at every half-degree of heating, but also because the EU’s dependence on imported fossil fuels – from Russia, or from the US – is a glaring strategic and economic weakness. In fact, the grand irony of Trump’s pro-fossil fuel agenda is that he has exploded the green re-industrialisation that actually was taking place, thanks to Joe Biden’s Inflation Reduction Act, leaving the door wide open for someone else.So, to paraphrase the tech bros, if Trump is going to move fast and break things, then let’s move fast and build things.“Europe can turn this into a window of opportunity to further its edge with the US on clean tech,” says Simone Tagliapietra of the Brussels thinktank Bruegel. He advocates for a decarbonisation bank, completing the single market as urged by Mario Draghi, and issuing new eurobonds.The mantra going forward should be “whatever it takes” to fully replace fossil fuels with renewables – designed in Europe, built in Europe – so that it never spends $350bn to import gas from the US, Russia, or anywhere else.

      Alexander Hurst is a Guardian Europe correspondent More

    • 150 Shares85 Views

      in US Politics

      Noaa fires hundreds of climate workers after court clears way for dismissals

      by

      Letters went out to hundreds of workers at the National Oceanic and Atmospheric Administration (Noaa) on Thursday, informing them their jobs had been terminated – again.The probationary employees, many who performed important roles at the US’s pre-eminent climate research agency, have spent weeks in limbo after being dismissed in late February, only to be rehired and put on administrative leave in mid-March following a federal court order.“Well after about 3 weeks of reinstatement, I, along with other probationary employees at NOAA, officially got “re-fired” today,” Dr Andy Hazelton, a scientist who worked on hurricane modeling at Noaa posted on X. “What a wild and silly process this has been.”The fired Noaa employees were among the roughly 16,000 people terminated across the federal workforce in a sweeping move by the Trump administration that targeted workers in “probationary” status. Some were categorized that way because they were new in their careers, but others had recently received promotions or been added full-time to agencies after years of contract or temporary work.“The majority of probationary employees in my office have been with the agency for 10+ years and just got new positions,” said one worker who still had their job, and who spoke to the Guardian under the condition of anonymity for fear of reprisal in February, when the firings first happened.“If we lose them, we’re losing not just the world-class work they do day-to-day, but also decades of expertise and institutional knowledge.”This week’s news caps a rollercoaster period for Noaa employees. On Tuesday, the US supreme court struck down the March court decision that said fired probationary workers must be rehired, ruling that the nonprofit groups who sued on behalf of the workers did not have legal standing.The letters sent to Noaa staff, reviewed by the Guardian, were signed by John Guenther, acting general counsel of the US Department of Commerce, and consisted of two simple paragraphs: one reiterating that employees were reinstated and put in non-duty paid status, and a second explaining that the temporary restraining order protecting their jobs was no longer in effect.“Accordingly, the department is reverting your termination action to its original effective date,” Guenther wrote, adding that fired employees would not receive any pay beyond their termination date.It’s unclear whether those fired will receive all the pay they are owed. Hazelton told the Guardian that paychecks for the last two weeks have not been issued yet. His access to healthcare, which was terminated immediately, was never reinstated.These firings are already hampering the agency’s ability to provide essential climate and weather intelligence. Noaa is also bracing for more cuts as leaders make moves to comply with Trump’s “reduction in force”, an order that could cull 1,029 more positions.In an interview with the Guardian last month, Hazelton said the firings across the agency and the pressures felt by those still there will affect the outcome of the work. Vital work has slowed or stopped as teams try to navigate the chaos, along with the threat of severe budget cuts and political restrictions.“It’s going to create problems across the board,” he said, adding that people are going to do their best but it will be a lot harder to achieve the mission. “It may be a slow process but the forecasts are going to suffer and as a result people will suffer.”While the losses are expected to have a profound impact on the American public, it will be felt globally, too. Scientists and forecasters around the world depend on Noaa satellites, studies, and intelligence, including data-sharing that tracks severe weather across Europe, coordination for disaster response in the Caribbean, and monitoring deforestation and the effects of the climate crisis in the Amazon rainforest.The official terminations also came just days after the White House pulled funding for the national climate assessment, which summarizes the effects of rising global temperatures on the US.The crackdown on climate science comes as the dangers from extreme weather events and deadly billion-dollar disasters continue to rise. Experts say these cuts, which will do little to limit the federal government’s budget, will only add to the threats.Among 800 positions cut were workers who track El Niño-La Niña weather patterns around the world, people who model severe storm risks, and scientists contributing to global understanding of what could happen as the world warms. More

    • 238 Shares109 Views

      in US Politics

      Whatever Donald Trump does next, this chaos will soon be shaping ordinary lives for the worse | Gaby Hinsliff

      by

      If it’s brown, lie down. If it’s black, fight back. If it’s white, say goodnight.The rhyme we learned hiking as a family through Yellowstone national park last summer is meant as a cheery reminder of how not to get eaten, if you meet a bear. Brown bears are best appeased by playing dead; black bears need to know this will hurt them more than it hurts you; and luckily there aren’t any polar bears in Yellowstone, because nothing deters them.Until this week the world remained unsure what kind of bear Donald Trump was. Keir Starmer treated him like a brown bear, dropping to the floor when threatened with tariffs and offering up a trade deal. China saw a black bear, to be met with maximum aggression. Though one day we may have to contemplate the prospect of a polar bear president – one who actually means what he said about invading his neighbours – for now what we actually seem to be facing is a crazy bear. There’s no discernible strategy or pattern here: just untrammelled ego, dragging the global financial system to the brink of meltdown and vaporising his own supporters’ retirement savings for no obvious reason beyond the pleasure of seeing impoverished allies desperately “kissing my ass”. And though this bear has lumbered back into the woods for now, seemingly spooked by a concerted revolt in the bond markets, the damage is done.What is still for the cheerfully news-avoidant just a faintly incomprehensible story about rising and plummeting stock markets will, in coming weeks, start shaping everyday lives for the worse. British businesses who have barely been able to work out if they’re coming or going for the last few weeks will pause big decisions while they try to calculate their losses. Our car and steel industries still face job-destroying higher tariffs, while Trump has talked ominously of new tariffs on pharmaceuticals to come (British drug companies rely heavily on US export markets). Along with all countries that did not retaliate against Trump, we remain saddled with a random 10% tariff on all exports, which could presumably still change on a whim. And if the US keeps up its self-harming tariff on China – now an eye-watering 145%, according to the White House, which is adding Wednesday’s 125% to the pre-existing 20% – then before long it won’t just be a case of prices rising for American shoppers but of trade between them breaking down completely, leaving American shelves empty. All this makes nervous consumers worldwide less inclined to spend and employers less likely to hire or invest, raising the risk of recessions – one reason that on Thursday, the markets fell again. There’s no security for working people in any of this, and vanishingly little prospect of growth. For a Labour government elected to deliver both, that is an existential challenge.You can either be the disrupter or the disrupted, Starmer warned his cabinet in February, rather startlingly for someone whose watchword was caution. His chief of staff, Morgan McSweeney, has however concluded that the new political divide isn’t left v right but “smash the system” v “look like the system and get smashed”. The obvious disruptive influence then was Nigel Farage’s resurgent Reform UK party, not a trade war, but one may now feed the other.Farage has gone very quiet lately about his now toxic friendship with Trump, but his local election message to England’s post-industrial heartlands is a blatantly Trumpian one about the glory days of manufacturing. This week he went to the pub with workers from British Steel’s endangered Scunthorpe plant – though it was Labour ministers who put in the unsung hours on a deal to save jobs there – before visiting a long-closed colliery to explain that he always thought the miners were betrayed. (Let’s just say that must have been an unusual view in the City, where at the time of the miners’ strike, Farage was working as a commodities trader.) It’s preposterous – Reform’s blend of tax cuts for the rich and dead-end nostalgia for everyone else would do nothing to revive former coal and steel communities – but Trump posing as the rust belt’s saviour seemed preposterous once, too. Farage knows where the electoral sweet spot is, in the seats where Reform is nipping at Labour heels: tacking right on issues such as immigration but left on economics. And while Starmer’s government is quick to compete with Reform on the former, it is more wary of the latter, even though ageing “red wall” voters now complain in focus groups of markets being rigged against them in ways that uncannily echo the disenchanted, Green-leaning southern young.But if Trump is really killing growth, meaning there will be no generous rising tide to lift public services and living standards, the only remaining options are either redistribution or accepting inexorable decline. Time, in short, to pick some enemies; to disrupt something before getting disrupted.Which markets genuinely are stacked against consumers? Who is making profits that can’t be justified? If Trump really has broken the old model, could it be built back better? This can’t mean uncosted, utopian leftwing populism but serious-minded, rigorous reforms that demonstrably put money back in ordinary pockets.What voters seem to want, the American data scientist David Shor and the writer Ezra Klein argued recently in a podcast on the confused desires underpinning American politics, is an “angry moderate”: someone who sounds as furious as they are about the state of things without seeming too frighteningly radical. There is plenty a British angry moderate could attack: from the ongoing debacle of Thames Water to the bafflingly opaque “surge pricing” now operated by everyone from concert-ticket vendors to pubs and hotels; from inequities in the tax system, or the way linking electricity prices to gas keeps them frustratingly high, to the outsourcing of social services that has left private equity firms running children’s homes and nursing homes for profit. (Not entirely alien territory to Rachel Reeves, who once told me that investigating the collapse of the outsourcing company Carillion as a backbencher changed her politics, and who has long embraced the idea of an activist state working to make life less precarious.) But whatever form it takes, offering people “shelter … from the storm”, as Starmer rightly has this week, should mean more than corporate bailouts. If not, anger with Trump could easily morph into anger with domestic governments’ inability to protect their own people from the fallout.He won’t be president for ever. But the mess he’ll leave behind, the jobs lost, the dreams smashed, the neighbourhoods spiralling downwards? That’s the polar bear, the thing that really eats governments. Fight, or say goodnight.

      Gaby Hinsliff is a Guardian columnist

      Do you have an opinion on the issues raised in this article? If you would like to submit a response of up to 300 words by email to be considered for publication in our letters section, please click here. More

    • 100 Shares71 Views

      in US Politics

      Pentagon chief says US could ‘revive’ Panama bases

      by

      The US defence secretary has floated the idea of the country’s troops returning to Panama to “secure” its strategically vital canal, a suggestion quickly shot down by the Central American country’s government.Pete Hegseth suggested during a visit to Panama that “by invitation” the US could “revive” military bases or naval air stations and rotate deployments of its troops to an isthmus the US invaded 35 years ago.He also said his country was seeking free passage through the canal for its navy ships – which Donald Trump had said were “severely overcharged and not treated fairly in any way, shape or form”.Trump, since coming to power in January, has repeatedly claimed that China has too much influence over the canal, which handles about 40% of US container traffic and 5% of world trade.His administration has vowed to “take back” control of the strategic waterway that the US funded, built and controlled until 1999.Hegseth suggested on Wednesday the former US military bases that dot Panama could be used again to host American troops.He said a deal signed with Panama this week was an “opportunity to revive, whether it’s the military base, naval air station, locations where US troops can work with Panamanian troops to enhance capabilities and cooperate in a rotational way”.While Hegseth cited the possibility of joint exercises, the mention of a rotational force was likely to raise the hackles of Panamanians, for whom sole ownership of the canal is a source of national pride.The US has long participated in military exercises in Panama. However, a longer-term rotational force – such as the force the USmaintains in Darwin, Australia – is politically toxic for Panama’s centre-right leader, José Raúl Mulino.His government quickly slapped down the idea. “Panama made clear, through President Mulino, that we cannot accept military bases or defence sites,” said Panama’s security minister, Frank Abrego, in a joint public appearance with Hegseth.Hegseth also said the US was seeking an agreement under which its warships could pass through the canal “first, and free”.Jose Ramón Icaza, Panama’s minister for canal affairs, said: “We will seek a mechanism by which warships and auxiliary ships can have a compensation system for services, that is, a way to make them cost-neutral but not free.”The independent Panama Canal Authority (PCA) that manages the waterway said on Wednesday that it was seeking a “cost-neutral scheme” to compensate services rendered in security matters for warship tolls.Under current treaties, the canal is open to all countries and vessels must pay the same rates according to their capacity and cargo, regardless of their country of origin or destination.The PCA said the US recognised Panamanian sovereignty over the waterway, although Hegseth did not mention it in the news conference.The Pentagon chief’s two-day visit has been peppered with comments about China and its influence in Latin America. He said the US was not looking for war with China but would counter Beijing’s “threats” to the region.“We do not seek war with China. And war with China is certainly not inevitable. We do not seek it in any form,” Hegseth said. “But together, we must prevent war by robustly and vigorously deterring China’s threats in this hemisphere,” the former Fox News anchor said.China hit back after Hegseth’s comments, saying Washington officials “maliciously attacked China … exposing the US’s bullying nature”.Trump has zeroed in on the role of a Hong Kong company that has operated ports at either end of the canal linking the Atlantic and Pacific Oceans for decades.Hegseth asserted that China-based companies were also capturing Latin American land and infrastructure in strategic sectors, such as energy and telecommunications, and that China had too large a military presence in the hemisphere.“Make no mistake, Beijing is investing and operating in this region for military advantage and unfair economic gain,” he said.Under pressure from the White House, Panama has accused the Hong Kong-backed Panama Ports Company of failing to meet its contractual obligations and pushed for it to pull out of the country.The company rejected an audit on Wednesday that suggested it had failed to pay $1.2bn due under its concession.The ports’ parent company, CK Hutchison, announced last month a deal to offload 43 ports in 23 countries – including its two on the Panama canal – to a consortium led by the US asset manager BlackRock for $19bn in cash. A furious Beijing has since announced an antitrust review of the deal.The US invaded Panama in 1989 to oust the dictator Manuel Noriega, killing more than 500 Panamanians and razing parts of the capital. More

    • 175 Shares87 Views

      in US Politics

      Thursday briefing: Trump puts global tariffs on pause – but hikes them for China

      by

      Good morning. Two main pieces of news from Donald Trump yesterday: he has rolled back water efficiency standards to “make America’s showers great again”, because he likes “to take a nice shower to take care of my beautiful hair”; and he has rolled back the exorbitant tariffs he applied to many countries last week to 10% – but increased them for China. “No longer will showerheads be weak and worthless,” the White House said. This will come as welcome news for the many investors who have recently been taking a bath.It was a pretty chaotic change, all told: there were contradictory messages from Trump’s advisers on which countries would be affected, why he did it, and what Beijing should expect to happen next. Still, the markets breathed a large sigh of relief, and the S&P 500 had one of the strongest days of its postwar history. This morning, share indices in Asia have jumped in turn.But that still isn’t enough to undo the full damage that Trump’s hot-and-cold tariff policy has inflicted on the American and global economy – and only a fool would presume that a more settled approach is now a given. For the very latest, head to the business live blog; today’s newsletter explains what’s going on, and whether the reversal is a sign of strength or weakness. Here are the headlines.Five big stories

      Gaza | Israeli aircraft struck a residential block in war-ravaged northern Gaza on Wednesday, killing at least 23 people, including eight women and eight children health officials said, as the Israeli military is reportedly preparing to seize the entire city of Rafah.

      Trade | The UK and India have agreed 90% of their free trade agreement, businesses were told on a call with negotiators this week. There are hopes the UK government will succeed in finalising a highly coveted trade deal with India, a booming economy of 1.4 billion people, this year.

      Smartphones | Almost all schools in England have banned mobile phone use by pupils, according to a survey run by Rachel de Souza, the children’s commissioner for England. Among 15,000 schools, 99.8% of primaries and 90% of secondaries have some form of ban.

      Defence | Hot weather is expected to bring highs of 24C to the UK as fire services continue to warn of wildfires across the country. The Met Office said temperatures would peak on Friday in London and south-east England, which could make it the hottest day of the year so far, while temperatures could hit 23C on Thursday.

      BBC | A controversial sculpture outside the BBC’s headquarters has been restored and put back on display behind a screen after being vandalised, with the corporation saying it in no way condoned the “abusive behaviour” of its creator, Eric Gill. There have long been calls for Gill’s works to be removed since his diaries revealed he had sexually abused his two eldest daughters.
      In depth: ‘THIS IS A GREAT TIME TO BUY!!!’View image in fullscreenAt 9.37am Eastern Time, Donald Trump advised his followers with an appetite for speculation: “THIS IS A GREAT TIME TO BUY!!!” Less than four hours later, in what Treasury secretary Scott Bessent magnificently described as “one of the most extraordinary Truth posts of his Presidency,” he announced the rollback of his tariff policy, and the market duly soared. Is it insider trading if your source is the president?Anyway, as the dust settled, traders kept buying. That was claimed as a major victory by Trump: “It’s up almost 2,500 points,” he said. “Nobody’s ever heard of it. It’s got to be a record.” But the reality is that the mood of uncertainty he has created will not easily be dispelled.What does the US tariff regime look like now?With the caveat that this is liable to change at any moment even though everyone in the White House is now asleep, here’s where things now stand: China’s tariff was raised to 125%, which means – given an existing 25% tariff – that some goods are now subject to an additional 150% rate. That is massively up on the 34% Trump announced last week. With a new 84% tariff in response yesterday, Trump again said that Beijing has been “ripping off the USA”. Every other country which saw its tariff raised above the baseline 10% in Trump’s “liberation day” announcement has seen the rate dialled back to that 10%. So no change for the UK; a very significant change for Vietnam (46%), India (26%), the European Union (20%), and the Falkland Islands (41%), whose 3,600 residents can now resume selling Americans frozen fish. Trump initially claimed that this was because more than 75 countries, of 190 affected, had sought to negotiate a deal without retaliating. The higher tariffs are paused for 90 days, and could be reimposed or increased again. There was some confusion over what would happen to Mexico and Canada, whose tariffs were not included in the announcement last week because they had already been set as high as 25% on a large proportion of their exports. Scott Bessent said the 10% rate would apply to them too; the White House later contradicted him and said that their tariffs would remain unchanged.Where does this leave China?In truth, the new announcement doesn’t change much. With tariffs that high, Trump might as well set them to a gazillion per cent and demand every import comes with a free Fabergé egg: the additional rate will make a minimal difference, because hardly anyone will be exporting anything from China to the US. The World Trade Organization forecast yesterday that trade between the two countries could drop by 80%, or $466bn a year.So is the goal to tank the Chinese economy, or to force China to negotiate? That was unclear yesterday. Bessent praised Trump for “goading China into a bad position” so that they “showed themselves to the world to be the bad actor”. That would seem to imply the tank strategy. But Trump himself took a much sunnier line later on: he told reporters that president Xi Jinping “is a smart guy and we’ll end up making a very good deal.”It is certainly plausible that the two sides will eventually arrive at some figure that both can present as a victory domestically. But as Amy Hawkins writes in this piece, that is unlikely to be on the basis of a major Chinese retreat. That is partly because Chinese exports to the US are largely consumer goods, badly exposed to eye-watering price increases, while the goods going the other way are commodities whose expense can be at least somewhat absorbed before they reach the consumer market.What about the UK?In one sense, the UK is exactly where it started: because it was already on the lowest 10% rate, nothing has changed. On the other hand, the fact that 10% is now the same rate as almost everyone else erases the comparative advantage that has been presented as a bright side.Speaking to ITV before the latest announcement, Keir Starmer reiterated that “a trade war is in nobody’s interest” but that retaliatory measures remained on the table. He also acknowledged that it was impossible to know if the 10% will ever be removed. In this piece, Rowena Mason reports that Whitehall sources are “increasingly downbeat” about striking a deal to reduce the tariffs.Why did Trump do it?That depends on who you ask. White House press secretary Karoline Leavitt implied that the change was part of a long-term strategy, saying that reporters had “clearly missed the art of the deal” and “failed to see what President Trump is doing here”. Bessent claimed similarly that this had been Trump’s “strategy all along”. And Trump advisor Stephen Miller claimed it was “the greatest economic master strategy from an American president in history”.But those confident assertions looked a bit shakier when Trump himself emerged to speak to reporters and said that he was acting in a “flexible” way, and that he reacted because “people … were getting a little bit yippy, a little bit afraid”. He also said that “A lot of times it’s not a negotiation until it is”, so make of that what you will. As for what he does next: that will be based on “instinct”, he said.The economist Mohamed El-Erian suggested that Trump was responding above all to a major sell-off in US government debt, a dangerous sign of investor scepticism of the US since its bonds are generally viewed as a safe harbour in an economic storm. The New York Times reports that Bessent and other advisors emphasised the issue in a meeting with Trump yesterday morning. But if you concluded that Trump may just as easily have made a capricious choice based on no serious rationale at all, you wouldn’t sound like an idiot.Where does this leave the markets – and the wider global economic outlook?In the context of the last week, this was a euphoric day for traders. The S&P 500 rose 9.5%, its biggest single-day climb since 2008; 494 of the 500 stocks covered ended higher than they began. One index of the improving mood was Goldman Sachs’ decision to rescind their recession forecast within hours of making it. Overnight, Asian markets have also climbed, and futures – a way to bet on prices ahead of markets opening – were up for European stocks and the FTSE 100.On the other hand, the S&P 500 is still down a significant 11.2% on where it was in February – and 10% universal tariffs are still a really big deal. Bob Elliott, a prominent hedge fund manager, said the market response was “likely far too positive” and noted that when taken alongside the Chinese rate and sector-specific rates elsewhere, the effective overall rate on imports is closer to 20%. That is only down 5% on where it stood before Trump’s announcement, and higher than it has been since the 1930s.The China tariffs alone could lead to a long term reduction in global GDP by nearly 7%, the WTO estimated. And when the dust settles, many companies will still be deeply sceptical that they can count on the kind of stability that tends to promote investment, new hiring, and economic growth.For now, the next questions are whether deals start to be struck, and whether improving share prices are the start of a sustained recovery or merely a “relief rally”. Jake Schurmeier, a portfolio manager at Harbor Capital Advisors, told Bloomberg: “Good news doesn’t eliminate the overarching uncertainty. We [will] likely go higher for a few days, but I think permanent damage has been done.”skip past newsletter promotionafter newsletter promotionWhat else we’ve been readingView image in fullscreen

      Richard Wright (above) once painted 47,000 stars on the ceiling of Amsterdam’s Rijksmuseum. Charlotte Higgins talks to the Turner prize-winning artist about his gorgeous, insanely intricate work – which he describes as “torture”. Alex Needham, acting head of newsletters

      Amazon’s prestige drama about Jesus Christ, The Chosen, claims to have reached 280 million viewers – and it’s just the tip of the holy iceberg. Steve Rose has a great piece about how the Messiah became TV and box office gold. Archie

      Could New York ever have a democratic socialist mayor? The city’s residents could, in the unlikely event they vote for Zohran Mamdani. He’s offering a rent freeze, free buses and universal childcare. For Interview magazine, 18 New Yorkers grill him. Alex

      Alice Wilkinson has lived in eight houseshares, and has the stories to show for it. They are compulsively readable, especially the one about the housemate who stole all the cutlery. Archie

      The speed of Trump’s transformation (or degradation) of America has been breathtaking. Osita Nwanevu steps back and surveys the epic scale of the damage: “Humiliation, immiseration, chaos and more of all to come.” Alex
      SportView image in fullscreenFootball | A late goal for Nuno Mendes (above) gave Paris St-Germain a two-goal cushion in their Champions League quarter-final tie against Aston Villa. The 3-1 victory in the first leg came despite Morgan Rogers’ 35th minute opener for the visitors. In the night’s other first leg match, Barcelona beat Dortmund 4-0.Football | Liverpool are increasingly confident Mohamed Salah will sign a contract extension beyond this summer after progress in talks over recent weeks. It is a significant boost with the captain, Virgil van Dijk, also likely to extend his stay beyond June.The boat race | The bad blood between Oxford and Cambridge continues to fester in the buildup to Sunday’s University Boat Race, with fallout from the row over a ban on PGCE students competing leading to the abandonment of the women’s trial race on Wednesday morning.The front pagesView image in fullscreenTrump’s 90-day pause on tariffs dominate the front pages today. The Guardian splashes on “Trump pauses global trade war but hits China with 125% tariffs”, the Times leads with “Trump puts the brakes on tariffs for 90 days” and the Daily Telegraph has “Trump blinks first in trade war”. The FT is going with “Stocks soar as Trump presses tariffs pause button and hits China harder”, the Mail leads with “Trump blinks … but doubles down on China” and the Metro has “Trump risks the great maul of China”. In the Mirror, it’s “Great War of China”.In the Express, it’s “Kemi: PM must make more of our Brexit freedoms.” And the Sun runs with a story about Chelsea footballer Moises Caicedo allegedly driving without a licence, and “Police in swoop on £115m Chelsea ace”.Today in FocusView image in fullscreenRats, rubbish and rising taxes: why Birmingham stinks right nowWhy have the city’s bin collectors gone on strike? Jessica Murray reportsCartoon of the day | Ben JenningsView image in fullscreenThe UpsideA bit of good news to remind you that the world’s not all badView image in fullscreenMetuktire, a village in the Indigenous Capoto-Jarina territory in the Brazilian Amazon , stands as a stronghold against logging and mining in the rainforest. The village has preserved its traditional ways while embracing sustainable energy through solar panels.The community actively resists illegal intrusion by patrolling their territory and educating younger generations on environmental protection. They maintain their customs, such as harvesting cassava, while adopting modern conveniences such as mobile phones and solar panels (pictured above).Chief Beptok Metuktire remains a beacon of resilience fiercely defending the local heritage. “We have had goldminers and outsiders who wanted to occupy our lands,” he says. “We show them that this is our territory.”Bored at work?And finally, the Guardian’s puzzles are here to keep you entertained throughout the day. Until tomorrow.

      Quick crossword

      Cryptic crossword

      Wordiply More