In a second term of fiat, flubbing and flip-flopping, Trump pursued his desire to wield a club over everyone and everythingBy imposing punitively high tariffs, Donald Trump was playing a high-stakes game of chicken with the US's trading partners - but it was Trump who chickened out and suspended his tariffs just hours after they took effect. The president couldn't ignore the worldwide economic havoc that he had caused singled-handedly - stock markets were plunging, business executives were panicking and consumers were seething.Eager to persuade manufacturers to build new plants in the US, Trump said on Monday that many of his tariffs would be permanent. But for Trump, permanent evidently meant two days. Continue reading...
Shoppers stayed away in March as footfall declined 5% and stores worry US trade war could have chilling effectShoppers stayed away from the UK high street in March, a situation retailers said could worsen if the economic gloom caused by Donald Trump's tariff war hits consumer confidence.Footfall fell 5% in March to extend a downturn in February that retailers said could be attributed to a recent rise in inflation and pressure on pay packets since a brief revival during the January sales. Continue reading...
As China retaliates against tariffs, it is also making strategic manoeuvres on EU and Asia to maximise opportunitiesOn the basis of Napoleon's dictum never interrupt your enemy while they are making a mistake", there was a large incentive for China to do precisely nothing as Donald Trump displayed his determination to lose friends and induce market panic. Indeed, the Chinese advocates of passivity cited a social media meme attributed to President Xi Jinping: Do nothing. Win."Initially it was tempting for China to sit back and watch the US's former allies recoil at Trump's disruptive war on globalisation and let them realise that, by comparison, China represented an oasis of stability, modernity and predictability. Continue reading...
Time will tell how much damage has been inflicted on the credibility of Trump's economic policy and administrationDonald Trump's climbdown on Wednesday from the most draconian aspects of his tariff regime has uncovered a damning picture of chaos at the heart of his presidency without necessarily alleviating their most painful effects.The president's landmark liberation day" unveiling of tariffs in the White House Rose Garden on 2 April was supposed to be symbolic gateway to his promised golden age of American greatness"; instead, it triggered a cascade of global market crashes that prompted warnings of a recession, or even a 1930s-style depression, while Trump brushed it all off as temporary disruption". Continue reading...
The president's U-turn after his maverick plan threatened meltdown has echoes of the 2022 UK crisisA maverick economic policy announcement from a self-styled disruptor plunges the country's currency into freefall and puts rocket boosters behind the cost of government debt, prompting warnings of an economic nuclear winter and forcing a pretty undignified U-turn.If, on top of general concern, there has been a nagging sense of deja vu in Britain over the past 24 hours, then the ill-fated 49-day reign of Liz Truss as the UK prime minister may well be to blame. Continue reading...
The 12-month inflation rate of 2.4%, down from 2.8% in February, was largely fueled by a sharp fall in gas pricesThe price of eggs continues to soar for American consumers, rising by almost 6% in March even as overall inflation fell slightly.Breaking a record high for the third consecutive month, the average cost of a dozen large eggs hit $6.23 in March - more than double the price just 12 months earlier, according to new figures released by the Bureau of Labor Statistics on Thursday. This surpassed the previous record highs of $5.90 a dozen in February, and $4.95 in January. Continue reading...
In today's newsletter: White House officials send mixed messages over Trump's stunning U-turnGood 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.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. Continue reading...
by Phillip Inman and Kalyeena Makortoff on (#6WH3S)
We examine potential consequences of US president's market chaos, which could reach every corner of global finance and economyDonald Trump may have stepped back from his huge tariff rises on every country, except China, which now faces 125%, but the impact of the market chaos is likely to continue in the UK and beyond. The rest of the world still faces a blanket 10% tariff on all US exports.While much of the focus has been the direct impact of the tariffs on physical goods, Trump's actions threaten to reach every corner of global finance and the economy. Continue reading...
This live blog is now closedOne person probably more enthusiastic than most about the prospect of Universal opening a theme park in the UK is the Lib Dem leader Ed Davey. He is a great fan of outdoor activity-related photocalls, and he's been at it again today, and the Gloucester Ski and Snowboarding Centre in Matson, Gloucestershire.Almost 40 MPs and peers have signed a letter organised by Jeremy Corbyn calling for an independent inquiry into the government's role in the war in Gaza.Many people believe the government has taken decisions that have implicated officials in the gravest breaches of international law.These charges will not go away until there is a comprehensive, public, independent inquiry with the legal power to establish the truth.Last month, I wrote to the Prime Minister calling for an independent inquiry into the UK's involvement in Israel's assault on Gaza.Today, more than 30 MPs have supported that call. Continue reading...
by Presented by Michael Safi; produced by Eli Block, on (#6WG7G)
As countries reel from the Trump tariffs, can a global recession still be avoided? Richard Partington reportsJust after midnight on Tuesday, EDT time, the wall of tariffs Donald Trump announced last week came into effect. The new system upends decades of precedent from the world's strongest economy and has sent global markets reeling.The Guardian's senior economics correspondent, Richard Partington, explains to Michael Safi the dynamics of a market crash and a trade war and how together they may contribute to the onset of a global recession. However, as he makes clear, the world is not yet in that worst-case scenario and steps can still be taken to minimise the risk. Continue reading...
by Jessica Elgot Deputy political editor on (#6WFT6)
Chancellor says asking shoppers to prioritise UK products would make country too inward-looking'Rachel Reeves has declined to back calls for the UK government to launch a buy British" campaign in response to Donald Trump's tariffs, saying it would make Britain too inward-looking".However, Downing Street said the Cabinet Office was examining procurement rules and said there were already policies in place to incentivise using the government's purchasing power for British companies. Continue reading...
by Rebecca Ratcliffe, south-east Asia correspondent on (#6WFNG)
The move has sent shock waves through a region of US strategic importance that had respected Trump as tough on BeijingVietnam had tried to appease Donald Trump: tariffs on US goods were reduced; regulations were passed to allow Elon Musk's SpaceX to launch its Starlink in the country. The prime minister, Pham Minh Chinh, even joked in January that he would happily play golf all day long" at Trump's Mar-a-Lago home in Florida if it could bring benefits to my country and my people".The strategies do not appear to have worked. Trump has inflicted an extraordinary 46% tariff on Vietnam that threatens to devastate its economic growth plans and undermine relations between the two countries. The tariff has sent shock waves through Vietnam, a manufacturing powerhouse where Trump has always been fairly popular, and across south-east Asia. Continue reading...
Chinese foreign ministry calls comments by US vice-president ignorant and disrespectful'Beijing has hit back after the US vice-president, JD Vance, referred to Chinese peasants" in an interview defending Donald Trump's tariffs.Speaking to Fox News last week, Vance asked: What has the globalist economy gotten the United States of America? And the answer is, fundamentally, it's based on two principles - incurring a huge amount of debt to buy things that other countries make for us. Continue reading...
Traders leaving the New York Stock Exchange were trying to make sense of another day of volatilityTraders leaving the New York Stock Exchange after the bell closed on Monday were sanguine about what had been, by an measure, a day of mood swings on Wall Street, as waves of volatility shook the stock markets, each one created by another deluge of headlines around Donald Trump's trade war and global economic uncertainty.The markets opened down a lot, then there was a rumor that the tariffs were off, and they went back up, then all bets were off again and it went down," said Steve Kos of Option Circle, who offered a series of trading day comparisons as he walked out on to Broad Street in lower Manhattan. Continue reading...
In today's newsletter: As Keir Starmer weighs up his response to Washington, the prime minister holds an unfavourable handGood morning. Everyone was very impressed when David nobbled Goliath with a rock to the forehead, but Keir Starmer might be forgiven for scoffing at how easy he had it. At least David got to choose his slingshot. In the global trade war, it is the large philistine in the White House who has picked the weapons - and in the hands of a relative minnow like the UK, the truth is that tariffs will barely make a dent.With that unpromising alternative on the horizon, Starmer spent yesterday talking about what he can do to help business at home, instead. But the changes he announced to support the car and pharmaceutical industries - even if they are backed up with more action later this week - also look trivial against the size of the task. And as the US president's latest threat to impose an additional 50% tariff on Chinese imports makes abundantly clear, there is no guarantee that it won't get bigger still.NHS | Hospitals in England could axe more than 100,000 jobs as a result of the huge reorganisation and brutal cost-cutting ordered by Wes Streeting and the NHS's new boss. The NHS Confederation, which represents trusts, estimates that an order to cut corporate functions by 50% could mean shedding between 3% and 11% of the workforce.Gaza | Autopsies conducted on 15 Palestinian paramedics and civil emergency responders who were killed by Israeli forces in Gaza show they were shot in the upper body with intent to kill", according to the Palestinian Red Crescent, which is demanding an international investigation into the attack.Conservatives | One of the Conservatives' biggest donors has stopped funding the party in a move insiders believe will result in the closure of its northern HQ, the Guardian can reveal. Richard Harpin, the founder of home repairs business HomeServe, has donated 3.8m to the party since 2008 and loaned Rishi Sunak a helicopter during the last election campaign.Asylum seekers | At least 250 people who were detained at Manston asylum centre when it was dangerously overcrowded are suing the government for unlawful detention and other breaches of their rights. They include a woman who had a miscarriage and a teenager who was a victim of torture and trafficking.Fertility | Surgeons are hailing an astonishing" medical breakthrough as a woman became the first in the UK to give birth after a womb transplant. Grace and Angus Davidson named their daughter Amy Isabel after Grace's sister Amy, who donated her own womb, and Isabel Quiroga, a surgeon who helped perfect the technique. Continue reading...
Ex-Bank of England deputy governor Charlie Bean says cut of 0.5 points needed because of crazy situation' in USThe Bank of England should use its meeting next month to cut interest rates by at least half a percentage point to 4% in response to the financial turmoil created by Donald Trump's trade tariffs, the former deputy governor Charlie Bean has said.He believes an aggressive strategy is needed to combat the fallout from Trump's tariff war, which has knocked trillions of pounds off global stock markets, undermining business and consumer confidence. Continue reading...
by Cecilia Nowell (now); Lucy Campbell and Tom Ambros on (#6WERS)
This blog has now closed. You can read more of our US politics coverage hereEU ministers are in Luxembourg to consider the European Union's response to Trump's sweeping tariff regime amid continuing market turmoil and heightened fears of a global economic recession.It comes after Trump doubled down on his tariff policy in comments aboard Air Force One overnight. He said Europe has treated us very, very badly," and has taken our leaders for a ride", and declined to hold talks on changing tariffs unless they pay us a lot of money on a yearly basis". He also repeated criticism of Europe for not spending a fair share on Nato. Continue reading...
John Bailey does the sums on the 10% tariff imposed by the US, and Lee Wilkinson has a Crocodile Dundee momentNot surprisingly, Labour ministers are claiming the imposition of only" a 10% across-the-board tariff on UK exports to America (excluding steel, aluminium and automobiles, already hit with a 25% rate) as vindication of their diplomatic skill in dealing with Donald Trump(It could've been much worse': how UK avoided a bigger blow from Trump tariffs, 5 April).In fact, the figure of 10% owes less to diplomacy and rather more to the method used to calculate the tariff. The algorithm applied is simple (and simplistic) in the extreme: the tariff equals either the total deficit in US trade with a particular country, divided by the value of that country's exports to America and then halved, or a default 10%, whichever is larger (Trump's idiotic' and flawed tariff calculations stun economists, 3 April). Continue reading...
In today's newsletter: Why the global sell-off continued in earnest this morning - and why it mattersGood morning. The markets might have been closed over the weekend, but the break has offered little respite for those who might have hoped for some sign that Donald Trump would consider a change to his tariffs policy.With White House officials and the president himself insisting that their plan was the right one despite the global economic meltdown it has induced, the market sell-off in response continued in earnest this morning in Asia - and traders in Europe and the US will be braced for more of the same later today.War crimes | A war crimes complaint against 10 Britons who served with the Israeli military in Gaza is to be submitted to the Met police by one of the UK's leading human rights lawyers. Michael Mansfield KC is one of a group of lawyers behind a dossier alleging targeted killing of civilians and aid workers.France | The French far-right leader Marine Le Pen has told supporters in Paris she would fight a political, not a judicial ruling" that could bar her from the next presidential election, as a rival rally denounced an existential threat" to the rule of law after her conviction for embezzling public funds.UK politics | Labour and the Tories have become embroiled in a war of words after the Conservative leader, Kemi Badenoch, defended Israel's decision to deny two MPs entry into the country and deport them. MPs from across parliament criticised Badenoch for her response to Israel's decision to expel the Labour MPs Yuan Yang and Abtisam Mohamed.Deaths in custody | More than 100 relatives of people who have died after contact with the police in the UK since 1971 have joined plans for a class action lawsuit in pursuit of compensation and justice. Organisers had recorded 3,000 deaths involving the police in the UK over the past 50 years, during which time four police officers have been convicted over a killing.Olivier awards | The play Giant, which portrays children's author Roald Dahl amid an outcry about his antisemitism, has triumphed at the Olivier awards on a star-studded night at the Royal Albert Hall in London. Among three awards for the production, US star John Lithgow took home the best actor prize for his performance as Dahl. Continue reading...
Carmakers will be given more flexibility over targets on transitioning to electric vehiclesKeir Starmer has said the government will step in to support key British industries, as business grapples with the economic turmoil unleashed by Donald Trump's global tariffs.As the government attempts to counter the impact of the White House hitting the UK with a 10% base levy on exports to the US, the prime minister will promise to help shelter vulnerable sectors and will implement key parts of the industrial strategy months early. Continue reading...
by Maya Yang (now); Yohannes Lowe and Vicky Graham (e on (#6WE88)
Kevin Hassett claims tariffs will not have a big effect on US consumers and there will be no political coercion' over interest ratesStarmer orders economic reset amid Trump's tariff mayhemIndonesia, Southeast Asia's largest economy which faces a 32% tariff rate, said it will not retaliate against the levies and would instead pursue diplomacy and negotiations to find mutually beneficial solutions. Jakarta has said it would send a high-level delegation to the US for direct negotiations with the government.Cambodia asked the US government on Friday to postpone the 49% tariff rate on its products, the highest rate in Asia and second-highest globally.Vietnam's leader To Lam and Donald Trump agreed on Friday to discuss a deal to remove tariffs (Vietnam will be subject to a 46% tariff).Brazil, which faces a 10% levy on its exports to the US, has said its government is evaluating all possible actions to ensure reciprocity in bilateral trade, including resorting to the World Trade Organization, in defense of legitimate national interests".Taiwan's top financial regulator said this morning it will impose temporary curbs on short-selling of shares to help deal with potential market turmoil brought resulting from the new import tariffs. Taiwan's government said on Thursday that the new 32% tariff rate levied on the island were unreasonable and it would discuss them with Washington.China has hit back hard against Trump's imposition of 34% tariffs on Chinese goods, which were already subject to a 20% levy, taking the total levy to 54%. Beijing in turn announced a slew of countermeasures, including extra levies of 34% on all US goods and export curbs on some rare earth minerals.Canada announced a limited set of counter measures against the latest US tariffs. The new Canadian prime minister Mark Carney said the government will copy the US approach by imposing a 25% tariff on all vehicles imported from the US that are not compliant with the US-Mexico-Canada trade deal (Canada and Mexico were exempt from Trump's latest duties because they are still subject to a 25% tariff related to the US fentanyl crisis for goods that do not comply with the US-Mexico-Canada rules of origin). Carney says Canada will retaliate against unjustified, unwarranted" tariffs.The Israeli prime minister, Benjamin Netanyahu, is set to travel to Washington to meet with his close ally, US president Donald Trump. Continue reading...
The factory that produces the Land Rover employs 9,000 people - now the town is in the middle of a perfect storm' created by the US president's import taxes on carsEver since the first Land Rover rolled off the production line in Solihull in 1948, the medieval market town has become synonymous with the carmaker. But the fallout from the US president's recent actions threatens to wreak havoc on the flagbearer of the UK's automotive industry.Last week, Donald Trump announced new import taxes of 25% on cars and car parts coming into the US in a move the president said would drive growth and spur on investment. The Institute for Public Policy Research warns this could be costly, with 25,000 UK jobs at risk. Continue reading...
Instead of standing up to Trump, the PM is encouraging people who want to destroy our values to come and do it in our country at reduced tax ratesOn 1 April, the TV comedian John Richardsons, who you will have seen on many panel shows, announced he was becoming a teacher, having already completed the training in secret. I was humbled by Richardsons's decision to do something genuinely worthwhile and by his foolhardy bravery. How would he control a class of teenagers pre-armed with clips of him clowning around with Russell Brand on The Great Celebrity Bake Off?But it turned out Richardsons's story was merely an April fool prank. D'oh! The fact that the inspiring tale wasn't true left me deeply saddened, like the time I wept when my mum finally told me Father Christmas hadn't been eating the mince pies I'd made for him. I was 28 years old.Do you have an opinion on the issues raised in this article? If you would like to submit a letter of up to 250 words to be considered for publication, email it to us at observer.letters@observer.co.uk Continue reading...
Baseline' 10% import levy takes effect at US seaports, airports and customs warehouses, with some higher tariffs to begin next weekDonald Trump's 10% tariff on all imports from many countries, including the UK, has come into force after 48 hours of turmoil.US customs agents began collecting the unilateral tariff at US seaports, airports and customs warehouses on Saturday, with higher levies on goods from 57 larger trading partners due to start next week - including from the EU, which will be hit with a 20% rate. Continue reading...
Labour faces tough choices on its economic strategy. It must be guided more by its progressive values rather than political expediencyThe market reaction to Donald Trump's announcement last Wednesday that he would be levying punitive tariffs on imports from the rest of the world was immediate: US stock markets experienced their worst single-day decline since Covid. The long-term implications will depend on how permanent Trump's reshaping of the global economic order turns out to be. At the moment, his administration is sending contradictory signals as to whether these tariffs are here to stay, or whether they are intended to be used to in effect blackmail other countries into doing the bidding of the US. But the global recession they could trigger raises huge strategic headaches for a British government already struggling to square the fiscal circle and deliver its pledge to boostgrowth.There is no logic to Trump's trade populism: contrary to his claims, the US has done immensely well out of being the dominant economy in the global free trade system of recent decades. If Trump doesn't change course quickly, his act of economic self-sabotage will reverberate around the world, harming not just Americans, but triggering increasing poverty in America's poorer trading partners, generating even more of the global instability that has become synonymous with Trump's presidency. Continue reading...
PM ready to ditch old assumptions' and is debating possible changes to fiscal rules to boost growthKeir Starmer is preparing to rethink key elements of the government's economic policy in an emergency response to Donald Trump's tariff blitz, amid growing concern in Downing Street that the US president's trade war could do lasting damage to the UK.The prime minister believes, say allies, that old assumptions should be discarded" in the UK's response, suggesting he and the chancellor, Rachel Reeves, may be preparing to raise taxes again - despite having promised not to do so - or even possibly change their iron clad" fiscal rules to allow more borrowing and fire up economic growth at home in the event of recession. Continue reading...
Beijing has launched a charm offensive with other countries as US tariffs tighten. If they can't be won over, it may have no choice but to stimulate its vast domestic marketChina's leader, Xi Jinping, says he is prepared to dance if it means sidestepping some of the worst of Donald Trump's trade tariffs. Last week he sent a letter to India's president, Droupadi Murmu, urging her to join him in a tango to celebrate 75 years of bilateral trade.Xi said it was the right choice" for the two countries to be partners of mutual achievement and realise the Dragon-Elephant Tango'", which, he added, fully serves the fundamental interests of both countries and theirpeoples." Continue reading...
As the White House retools US imperialism with import duties, others must resist dependency - deepening regional ties and reducing exposure to chokepointsWhen Donald Trump stood before union auto workers in the Rose Garden he declared Liberation Day", promising to stand up for Main Street. Whether that pledge will be fulfilled is moot. He will declare victory either way. What the US president offered was not just an economic programme, but an imperial one.Mr Trump's logic, if it exists, lies in the 397-page report on foreign trade barriers" he brandished on Wednesday. Its message is brutally simple: you may sell your goods to Walmart shoppers, but only if you let US cloud services hoover up your data, US media flood your screens and US tech monopolies operate on their terms - not yours.TikTok is the test case for Trump's platform nationalism: only US firms may mine data, reap profits and rule the digital empire. Continue reading...
by Andrew Sparrow (now) and Yohannes Lowe (earlier) on (#6WD2G)
Union says the government should intervene directly and force the council to settle the disputeTrump claims Starmer very happy' about tariffsDowning Street has refused to confirm President Trump's claim that Keir Starmer was very happy" about the treatment the UK is getting under the new US global tariff regime. (See 9.32am.) Asked about the president's words at the morning lobby briefing, the PM's spokesperson said that the government had already set out its position yesterday and that it was disappointed" by the US tariff policy.Livia Tossici-Bolt has been sentenced at Poole magistrates' court to a conditional discharge for two years for two charges of breaching a buffer zone" outside an abortion clinic in Bournemouth, PA Media reports. See 11.22am. Continue reading...