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Michael Simmons Michael Simmons

Tariff turmoil: the end of globalisation or a blip in history?

Globalisation’s obituary has been written many times before but, with the turmoil caused over the past few weeks with Donald Trump’s various announcements on tariffs, could this mark the beginning of the end for the economic order as we know it? Tej Parikh from the Financial Times and Kate Andrews, The Spectator‘s deputy US editor, join economics editor Michael Simmons to make the case for why globalisation will outlive Trump. Though, as the US becomes one of the most protectionist countries in the developed world, how much damage has been done to the reputation of the US? And to what extent do governments need to adapt? Produced by Patrick Gibbons.

Spotlight

Featured economics news and data.

Alfie Pearce-Higgins

What’s the point of foreign aid?

The UK signed up to a UN target of spending 0.7 per cent of GNP on aid way back in 1970, but didn’t hit that level until 2013. In 2020, aid spending was cut to 0.5 per cent and last week Keir Starmer reduced it further to 0.3 per cent. This will save about £4 billion which will instead be allocated to military spending. There were predictable howls of anguish from aid advocates at the news, and the development minister resigned. There was also begrudging praise from Starmer’s Conservative opponents. But few seemed to question what the point of aid is, and whether a spending target, at any level, makes

Friday

James Heale James Heale

China hits back against Trump’s tariffs

Donald Trump has sown the wind – and now America must reap the whirlwind. Beijing has today announced plans to slap an additional 34 per cent tax on all US imported goods from next Thursday. China had already applied tariffs – ranging from 10 to 15 per cent – to a range of American agricultural products after the last round of charges from the Trump administration. But now, after Chinese goods were hit by this week’s hike, taking the rate to 54 per cent (the US had existing tariffs on China), Beijing has delivered fresh retaliation. Export controls have been imposed on seven rare earth elements critical to the production

Ryan Bourne

Will the markets make Trump see sense on tariffs?

This week Donald Trump declared ‘Liberation Day,’ unveiling a barrage of tariffs that had been trailed as correcting unfair trade practices overseas. In a theatrical Rose Garden ceremony, the US president presented a table, detailing a slew of new “reciprocal” tariffs targeting nations right across the globe. A sharp market reaction might lead to a change of heart in the White House Traditionally, trade reciprocity implies matching another country’s tariffs tit-for-tat. For instance, if the UK imposes a 10 per cent tax on US chicken, the US would impose the same import tax on British chicken. Many had anticipated that ‘Liberation Day’ would therefore introduce a complex array of tariffs reflecting

Matthew Lynn

Trump can’t ignore the stock market carnage forever

As it turned out, the only thing Liberation Day was actually liberating anyone from was their money. In the wake of President Trump’s imposition of a massive round of tariffs on America’s trading partners the stock market has been in freefall. For the moment Trump is ignoring that. But he won’t be able to forever – a bear market is too damning a verdict on his presidency.  You can’t ‘make America great again’ in a bear market Investors, to put it mildly, took one look at the latest round of tariffs, and dumped equities as fast as possible. In the wake of the tariffs announcement, the Dow Jones Industrial Average plunged

Thursday

George Magnus

How Trump’s tariffs will hurt China

China has been hit hard by President Trump’s tariff list, which he unveiled yesterday in the White House rose garden. As part of his ‘Liberation Day’, Trump imposed new 34 per cent tariffs on China. This seems to be in addition to the 20 per cent tariffs levied on the country by the US since January. And in addition to 11 per cent tariffs previously applied after Beijing was accused of violating international trade and harming US commerce. That means the average tariff on imported goods from China possibly stands at 65 per cent. Next month, things will get even worse for China when the ‘de minimis’ exemption will be phased

Ross Clark Ross Clark

Starmer is teaching Europe a lesson on tariffs

The reactions to Donald Trump’s tariffs between London and Brussels could not be more different. Where Keir Starmer was conciliatory, stressing that his government still hoped to negotiate with the US, European Commission President Ursula von der Leyen was quickly out of the blocks with threats of retaliation, saying that a package of measures was being finalised. It has since emerged that the EU plans to wait four weeks before imposing any retaliatory measures. Nevertheless it does rather expose the difference between the EU and post-Brexit Britain. The EU sees itself as a match for the US, and views Trump’s declaration of trade war as a power game. Britain, on the other

Sam Olsen

Trump’s tariffs could help China

Donald Trump is, at least, a man of his word. Before he won the US election, Trump said that China had ‘really taken advantage of our country’ and vowed to slap punitive tariffs on imports from the People’s Republic. As we have repeatedly seen, Trump carries through on his threats. ‘Liberation Day’ saw China hit with 54 per cent tariffs as payback for what the president deemed unfair policies, the highest rate on any country. Punishing US allies in Asia is not helpful for countering the threat from Beijing That this is part of a wider move against Beijing was made clear this week when, in a leaked memo, US

Andrew Lilico

Trump doesn’t understand how trade deficits work

After Donald Trump’s Liberation Day, the US now imposes far and away the highest tariffs of any developed country in the world. In the process of doing so Trump has completely rejected the cornerstone of the World Trade Organisation: the ‘most favoured nation’ principle whereby tariffs have to be the same on all countries you don’t have an explicit trade agreement with. He has also cast aside the US’s system of free trade agreements – for example, imposing tariffs on Australia despite there being a decades-old Australia-US agreement removing tariffs. His reasons for doing this reflect his dissatisfaction with the way the international financial order has worked for many years.

Philip Patrick Philip Patrick

Japan has been stunned by the Trump tariffs

Virtually the whole world is waking up to the reality, not threat now, of President Trump’s Liberation Day tariffs, but in few places will the sense of shock and resultant anxiety be greater than Japan, where a whopping 24 per cent has been slapped on exports to the US. The Japanese, who have grown used to a decent relationship with successive American administrations and a whopping trade surplus, will have many sleepless nights ahead. The reaction here has not been one of anger or resentment – more stunned bemusement. Prime Minister Shigeru Ishiba, who did his best to cozy up to Trump on a recent summit in Washington (he presented Trump

Michael Simmons Michael Simmons

This could be the largest US tax rise in half a century

Across the world, markets are plunging as they respond to the global tariffs Donald Trump unleashed from the White House rose garden last night – with the president’s top economist describing the falls as ‘short-term bumps’. The pound passed $1.30 for the first time in six months while stocks in Tokyo fell 4 per cent. On opening, the FTSE 100 fell nearly 2 per cent, despite the slightly more favourable 10 per cent levy we face compared to the 20 per cent Trump hit Europe with. How bad could these ‘bumps’ get for the US though? Trump returned to office promising tax cuts. But however he may spin his new

Matthew Lynn

Trump’s tariffs are just bizarre

They would restore manufacturing, force trade barriers to be taken down, and allow new industries to be created. There have been various different explanations for why President Trump’s new tariff regime made sense. And yet when they were finally revealed yesterday one point was clear. There was no logic. The tariffs were just weird. The big reveal turned out to be a board that flapped around in the wind outside the White House. Donald Trump marked Liberation Day by holding up a placard with a list of countries – each one with a number next to it. The White House has worked out the tariffs it estimates American goods face in

Kate Andrews Kate Andrews

Can Trump defend his tariff calculations?

When President Trump held up an easel in the White House Rose Garden illustrating each country’s ‘tariffs charged to the USA’ and the new ‘U.S.A. discounted reciprocal tariffs’, there appeared to be some small print underneath the first column, barely readable. Then printed copies started to circulate the garden. Underneath the column showing each country’s ‘tariffs charged’, it read: ‘including currency manipulation and trade barriers’.  It was clear that the figures published by the Trump Administration were their interpretation of tariff calculations. It was also immediately clear that some countries were going to dispute the figures. But exactly what had been calculated was not immediately obvious. The picture is still hazy

Martin Vander Weyer Martin Vander Weyer

Britain needs a Rearmament Isa

The City’s self-styled ‘cheerleader in chief’, Lord Mayor Alastair King, on a recent visit to Beijing and Shanghai found leading Chinese banks keen to expand in London. What with Chinese diplomats also keen to establish a fortress-embassy at Royal Mint Court on the City’s eastern edge, that may ring alarm bells with those who regard Xi Jinping’s neo-Maoist regime as anything but friendly. But as King also observes, ‘the tectonic plates are shifting’. All geopolitical relationships are up for review – though what follows is my own analysis, not the Lord Mayor’s. A previous British visitor to Shanghai, chancellor George Osborne in 2015, declared an urge to be ‘China’s best

Wednesday

Kate Andrews Kate Andrews

Trump has bet the house on tariffs

‘My fellow Americans, this is Liberation Day’, Donald Trump told the audience that had gathered in the Rose Garden for his official signing of his executive order to put import levies on goods imported to the United States from around the world. There was no hesitation, there were no caveats: only utter enthusiasm from both the President and almost his whole cabinet, who cheered Trump on as he declared 2 April ‘the day America’s destiny was reclaimed’. Vice President J.D. Vance, Health Secretary Robert F. Kennedy, Secretary of State Marco Rubio, Secretary of Homeland Security Kirsti Noem and House Speaker Mike Johnson were just some of the attendees, who all

Ross Clark Ross Clark

Trump’s tariffs are a real Brexit win

So, Britain has got its trade deal with the US – of sorts. Donald Trump has awarded Britain no exemption from his tariffs. Even so, he has left Britain off lightly, by imposing tariffs of 10 per cent on imports from Britain to the US – the lowest he imposed on any country, along with Brazil. The EU, by contrast, has been imposed with a tariff of 20 per cent. Finally, then, we have a tangible benefit of Brexit that no one can ignore. Were we still members of the EU, our exporters would be hit much harder than they are being. Given that the US is our single biggest

Michael Simmons Michael Simmons

Trump prepares to take his tariff war global

In just a few hours, Donald Trump is set to take his tariff war global. At 9 p.m. UK time (4 p.m. in Washington), the American President will unveil a sweeping set of trade tariffs, on what he’s dubbed ‘Liberation Day’. What exactly Trump plans to announce remains unclear, but reports suggest everything from global reciprocal tariffs to the enforcement of the 25 per cent duties originally aimed at Mexico and Canada could be on the table. As Katy Balls noted in today’s Lunchtime Espresso, any hopes in Whitehall of securing a UK exemption have all but evaporated. The focus has now shifted from lobbying to damage control, as the economic

Ross Clark Ross Clark

Labour’s welfare crackdown is a sham

You can already sense Rachel Reeves’s spin machine whirring into action. It was Donald Trump wot ruined my careful book-keeping, the Chancellor will tell us as once again her fiscal headroom disappears and she ends up banging her scalp painfully on the ceiling. But could it be unrealistic expectations for her welfare reforms which prove her undoing? Tucked away in the government’s own figures is the revelation that Labour’s welfare shake-up could result in 400,000 more people signed off unfit for any work. Britain’s workshy culture has received another boost The contents of the impact assessment on her Spring Statement, published by the Office for Budget Responsibility (OBR) last week,

Will Prescott

Trump’s tariff plan has been tried before. It failed

Donald Trump thinks ‘tariff’ is the ‘most beautiful word in the dictionary’. Today is ‘Liberation Day’, and the US president is holding true to his campaign trail promise to impose tariffs on imports. Cars, steel and aluminium are expected to be hit with levies of up to 25 per cent. A 10 to 20 per cent universal tariff on all goods imported into the United States is also said to be on the cards. Trump isn’t the first to think tariffs are a secret weapon. A century ago, the British Conservatives’ were obsessed by tariffs. Like Trump, they saw them as an ideal tool to promote industrial revival and lower taxes.

Peter Leahy

Trump’s tariffs could damage the dollar

Donald Trump says his tariffs are about liberation. But his aggressive turn toward protectionism may signal the beginning of a shift away from the foundations that have upheld American prosperity for decades. The US dollar’s status as the world’s reserve currency has long enabled the United States to consume far more than it produces, to run massive deficits without consequence, and to project unparalleled geopolitical power. Trump’s decision to slap tariffs of up to 25 per cent on imports could put that all at risk. When French president Valery Giscard d’Estaing referred to the United States’ ‘privilège exorbitant‘ he was not referring to America’s central position in the post-WW2 world

Tuesday

Matthew Lynn

The minimum wage is too high

Council tax is going up. Train fares are rising. Broadband will cost more, and so will electricity and water. April opens with a blizzard of price rises that will make it far harder for everyone to make ends meet, especially if they are on a low income. The one compensation is that the minimum wage is going up as well. There is just one catch, however. The UK now has one of the highest minimum wages in the world – and very soon it is going to become painfully clear it will start costing jobs. It is the one statistic the government will be boasting about on Tuesday. The National Living

Matthew Lynn

Starmer’s costly failure to get a Trump tariff carve-out

The UK should have been doing everything possible to secure an exemption from Trump’s tariffs. We could have scrapped the digital services tax that is largely levied on the American tech giants. We could have opened our agricultural markets – even to chlorinated chicken. Heck, we could have offered President Trump his own apartment in Buckingham Palace, given how much he loves the royal family. This was the opportunity of the decade – but the Starmer government has already blown it. We will find out the full extent of the tariffs Trump plans to levy on all of America’s main trading partners tomorrow on what he has oddly termed ‘Liberation