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‘More will come to us now’: what does Le Pen verdict mean for far-right’s future?
‘More
will come to us now’: what does Le Pen verdict mean for far-right’s future?
Despite
mixed views across France over RN leader since conviction, people are still
joining her party in support
The RN said
it had gained 20,000 new members in the four days after Le Pen’s conviction,
and half a million people had signed a petition on the party’s website to
support Le Pen.
Angelique
Chrisafis
Angelique
Chrisafis in Villers-Cotterêts
Sat 5 Apr
2025 05.00 BST
Near a roast
chicken stand at a rural market, Jocelyn Dessigny was giving out leaflets
bearing a photograph of the French far-right leader Marine Le Pen and the words
“Save democracy!”
“It is a
political attack,” he said of Le Pen’s criminal conviction this week.
After a
two-month trial in Paris, Le Pen was found guilty of organising a system of
fake job contracts to embezzle more than €4m (£3m) of European parliament funds
between 2004 and 2016. Judges placed an immediate ban on her taking part in
elections for five years, sparking fury from Le Pen, who said they had
effectively “excluded” her from the 2027 French presidential race.
“There’s a
sense of stupefaction,” said Dessigny, 43, a former sales manager who is a
member of parliament for Le Pen’s anti-immigration National Rally (RN) party in
the L’Aisne département in north-eastern France. The area, which has higher
than average unemployment and poverty levels, is a Le Pen heartland that has
contributed to some of the party’s highest electoral scores in recent years.
Dessigny now
found himself hurriedly organising car-shares to Paris where, on Sunday, Le Pen
will hold an open-air protest rally to challenge what she called a “tyranny of
judges” who wanted to stop her running in a presidential race she said she
could otherwise win.
Calling a
protest rally in Paris is a departure for Le Pen, who for more than a decade
has endeavoured to present her party as a mainstream operation that is able to
govern, rather than a repository for angry protest votes, even as political
opponents say its policy platform remains racist, xenophobic and anti-Islam.
Political
commentators speculated that after the embezzlement verdict, Le Pen’s party
might now revert to a more overtly populist approach. The rightwing head of the
northern Hauts-de-France region, Xavier Bertrand, warned that Sunday’srally
could be a Donald Trump-style response to stoke supporters’ fury. He said it
could be a “poor remake of the Capitol” – a reference to Donald Trump’s
supporters storming Capitol Hill in January 2021.
“We are
absolutely not in the spirit of the Capitol,” Dessigny said. “On the contrary,
this meeting is about calming and channelling people’s anger. So many voters
have got in touch that we had to do something to reassure them.
“We know
political opponents will attack us. For years they tried to demonise us, saying
we were crazy, neo-Nazi, antisemitic … But today, people know we’re just like
everyone else. We don’t want to get elected at any price, we defend our ideas.”
The RN said
it had gained 20,000 new members in the four days after Le Pen’s conviction,
and half a million people had signed a petition on the party’s website to
support Le Pen.
But several
polls showed a majority of people across France clearly approved Le Pen’s
conviction. One poll by Cluster 17 for Le Point found 61% thought her sentence
was justified. Another Elabe poll found a majority of French people felt it was
a normal conviction given the crimes she was accused of.
For Le Pen’s
electoral standing to grow she needs to expand beyond her core base and gain
support from pensioners, the traditional right and higher-earners. But those
new supporters now appear much harder to win over. Sunday’s Paris rally seems
primarily intended to show Le Pen’s historic supporters that she is not dead
politically and will appeal the verdict.
In
Villers-Cotterêts, a rural town of around 10,500 people north east of Paris,
the views at the market were mixed. The town, which has had a RN mayor for more
than a decade, is famous for being the historic home of the revolutionary
General Dumas, born to a French nobleman and an African slave, and father to
the writer Alexandre Dumas. Last year, the centrist president Emmanuel Macron
inaugurated the town’s restored castle as a museum to celebrate the French
language.
Paul, who
used to run a charcuterie shop, and his wife, Marceline, who had worked as a
housekeeper on Paris’s left bank, said they were standing by Le Pen. “This
wouldn’t change our vote for the party,” Paul said. “The RN vote is rising here
because people want change.”
Hugues, 64,
a former chef who now worked as a delivery driver to markets, once voted for
the socialist François Mitterrand, but now always chooses Le Pen. “I think
judges have done this to her deliberately, in order to break her because she’s
leading in public opinion,” he said. “I’ll still back her.”
Danièle, a
former Paris restaurant manager said: “I’m against injustice and I think Le Pen
was targeted politically. She’s a fighter, she’ll stand firm.”
Others
disagreed. A market worker in his 30s said: “Sorry but if you’re a crook, you
pay. Of course the judges’ verdict makes sense.”
Catherine,
73, a retired nurse and healthcare manager, said: “Any ordinary person would go
to jail, so why shouldn’t a politician face a tough sentence. It’s absolutely
crazy to have a rally in Paris, she’s a crook.”
Céline, 45,
an estate agent, had once voted for the right’s Nicolas Sarkozy but has since
abstained. Part of a demographic of non-voters that Le Pen is seeking to court,
she said the RN’s leader had “lost credibility” over the embezzlement verdict.
Some Le Pen
supporters said the 29-year-old party president Jordan Bardella could be an
alternative in the presidential race. Noël, a former tiler, said: “I’m for
Marine Le Pen all the way, but if Bardella stands as a new face for the party
he could do well.”
The town’s
RN mayor, Franck Briffaut, said if the judges had wanted to scupper Le Pen’s
political future, it could backfire: “New people have joined the party this
week, and I think more people will actually come to us now.”
At least 7 dead in tornadoes and flooding in the South and Midwest / Severe storms and tornadoes hit US south and midwest, killing at least seven
Severe
storms and tornadoes hit US south and midwest, killing at least seven
White House
approves Tennessee’s state of emergency request as further fatalities expected
to be confirmed
Oliver
Milman and Marina Dunbar
Thu 3 Apr
2025 22.24 BST
https://www.theguardian.com/us-news/2025/apr/03/storms-tornadoes-south-midwest
Violent
storms and tornadoes have torn across the US south and midwest, killing at
least seven people and downing power lines and trees, smashing homes and
upturning cars across multiple states.
The outbreak
of storms and tornadoes has resulted in at least seven deaths in Tennessee and
Missouri, with further fatalities expected to be confirmed. One of the victims
has been named: a 68-year-old man named Garry Moore who was a fire chief in
Cape Girardeau county, Missouri. At least a dozen injuries have also been
reported from the storms.
The White
House has approved a state of emergency request from Tennessee, where rising
floodwaters have menaced Nashville.
Indiana,
meanwhile, has declared its own state of emergency, activating 50 national
guard members to deal with severe weather that has affected 41 of the state’s
counties.
“In times
like these, I’m immensely grateful for the soldiers who are on the ground
ensuring Hoosier safety,” said Mike Braun, Indiana’s governor.
The storms
are now tracking east, after leaving more than 213,000 households without power
from Texas to Ohio. A “high-risk” excessive rainfall warning was issued by the
National Weather Service for parts of Arkansas, Tennessee and Kentucky that are
expected to be deluged over the next two days.
Dozens of
tornado and severe thunderstorm warnings were issued in parts of Arkansas,
Illinois, Indiana, Missouri and Mississippi on Wednesday evening. In Arkansas,
the National Weather Service told residents: “This is a life threatening
situation. Seek shelter now.”
At least one
person died due to the storms in Missouri, police there said, with multiple
reports of damage across several states. Homes were ripped apart in Lake City,
Arkansas, with trees shredded and cars flipped over.
In parts of
Tennessee, people were told to not use the roads due to the amount of debris on
them. Several Tennessee school districts have announced closures or virtual
learning in preparation for tomorrow’s anticipated storms, the Weather Channel
reports.
The
Tennessee governor, Bill Lee, after examining the devastation, said Thursday it
was too early to know whether there were more deaths as searches persisted.
A rare
tornado emergency was declared around Blytheville, Arkansas, on Wednesday
evening after debris was hurled at least 25,000ft into the air.
“It’s
definitely going to be a really horrible situation here come sunrise in the
morning in those areas, coming out of Arkansas,” Chelly Amin, a meteorologist
with the National Weather Service, told the Associated Press.
In Indiana,
winds reached 81mph (130km/h) and caused widespread power outages. Debris from
damage has covered roads in the state and schools have been closed.
While the US
south and midwest have long faced the prospect of such storms, the severity of
such events is being amplified by the climate crisis, scientists have said.
Tornadoes
may be shifting to different parts of the country, while a warmer climate holds
more moisture, leading to more intense downpours.
The coming
days are likely to bring severe flash flooding across several states, with more
than a foot of rain possible. There will be “significant, life-threatening
flash flooding” until Saturday, the National Weather Service warned, adding:
“Historic rainfall totals and impacts are possible.”
Flooding in
rural south-eastern Oregon caused by historic levels of snowmelt and rainfall
has prompted evacuation orders, school closures and public health concerns.
Officials
say more than 1,000 people are under the highest level of evacuation orders.
County authorities say drinking water is safe, but warn that floodwaters could
be contaminated with bacteria such as E coli. Residents have been urged to
avoid floodwaters when possible. The Oregon governor Tina Kotek declared a
state of emergency due to the flooding, which followed rapid snowmelt in the
area.
Heavy rain
has already started to swell rivers around Memphis, Tennessee, with the
National Weather Service warning of the threat of flooding in the city as soil
becomes saturated with water.
“Flash
flooding will emerge as a primary concern with this extremely active pattern,”
the weather service said on Thursday.
The looming
floods are likely to cause further damage and increase the death toll. One man
did manage an unusual escape, though, after a tornado destroyed his home in
Selmer, Tennessee.
Matt
Vandevander jumped into his bathtub to shelter from the storm but it ripped him
out of his house and threw him into his neighbor’s yard. Somehow, Vandevander
survived with just a few scratches.
“It’s a
miracle,” he told WMC, a CNN affiliate. “I’m very happy – happier than I
probably should be.”
How Trump cost America the world
How Trump
cost America the world
Friend and
foe alike will start piecing together a different global trade order that the
U.S. might like a lot less than the one it trashed.
Unpacked
April 5,
2025 4:00 am CET
By Jamie
Dettmer
Jamie
Dettmer is opinion editor at POLITICO Europe.
https://www.politico.eu/article/tariffs-stock-markets-how-us-donald-trump-cost-america-the-world/
“America is
lost!” a distressed King George III had noted, reviewing the causes and
consequences of the American Revolution. But will today’s would-be monarch in
Washington one day similarly regret having lost the world?
Unlikely.
U.S. President Donald Trump isn’t a man to admit mistakes — nor is he one to
express regret.
And as U.S.
stock markets plunged following his announcement of sweeping tariffs on 180
countries this week, Trump beamed that all would soon rebound and boom. America’s heading to
glory days. Vice President JD Vance, meanwhile, complained critics were taking
far too short-term a view: “We’re going to have a booming stock market for a
long time because we’re reinvesting in the United States of America,” he said.
But the
heavy-handedness Trump displayed, all based on cockamamie calculations and
deeply flawed economics, is as maddening as King George’s restrictive trade
practices toward the American colonies — and at least the British monarch had
the mitigating excuse of episodes of clinical madness.
Trump’s
declaration of economic independence and embrace of 19th-century protectionism
amounts to slamming the door on the rest of the world — and it will likely have
the unintended consequence of the rest of the world deciding, albeit painfully
and slowly, to remake a new global trade order to replace the one America
shaped, prospered from and has now abandoned.
It will also
have geopolitical consequences, as many countries are already exploring new
bilateral trade deals or examining how to expand regional trading blocs. U.S.
allies Japan and South Korea, for example, are seeking to bolster trade ties
with China and are talking about accelerating negotiations on their trilateral
free trade agreement. And the members of the Association of Southeast Asian
Nations and Comprehensive and Progressive Agreement for Trans-Pacific
Partnership are now looking to integrate faster.
In the
meantime, for Americans and much of the world, Trump’s self-styled “Liberation
Day” is bound to deliver a severe economic shock — one more likely than not to
trigger a global recession.
International Monetary Fund Director Kristalina Georgieva
has so far restricted herself to warning that Trump’s tariffs represent “a
significant risk” to the global economy. But analysts at JPMorgan have raised
their risk assessment of a global recession to 60 percent — up from a previous
prediction of 40 percent — warning customers that the impact could be
“magnified by retaliation, supply chain disruptions, and a sentiment shock.”
Of course,
much will depend on how countries respond to Trump’s tariffs. Retaliation, for
example, could invite countermeasures from Trump, prompting a tit-for-tat
spiral that worsens the global economic outlook. But their responses will also
hinge upon what Trump’s endgame really is — and that just isn’t clear.
The
disjointedness and chaos are inherent in the overall goal behind the strategy,
reflecting, in part, a split in the administration’s collective thinking.
Are the
tariffs a bargaining ploy to wring out deals that are favorable for the U.S.?
According to Trump’s son Eric, that’s what his father is after: “I wouldn’t
want to be the last country that tries to negotiate a trade deal with
@realDonaldTrump. The first to negotiate will win — the last will absolutely
lose. I have seen this movie my entire life,” he posted.
And Trump
himself indicated he’s open to trade negotiations, saying on Thursday that he’s
ready for talks with other countries about duties, if they offer something
phenomenal.
However,
this contradicts White House aides, who say the draconian tariffs aren’t a
bargaining tactic. Trump’s top trade aide Peter Navarro, for instance, told
CNBC the tariffs aren’t up for negotiation: “This is not a negotiation … This
is a national emergency,” he said.
The
calculations themselves are also nonsensical, based on a dubious formula
arrived at by taking the trade deficit for the U.S. in goods with a particular
country, dividing that by the total imports from that country, and then
dividing the resulting number by two.
So, are the
tariffs just a way of reversing U.S. trade deficits, which the formula would
suggest? There appears to be consensus within the administration that U.S.
trade deficits can only be a bad thing — the fault of malign trading partners
taking advantage. However, no thought is given to the counterargument that the
deficits are consequences of an overly strong dollar, unsustainable government
expenditure and Americans choosing to save, invest little and spend a lot.
Bearing that
in mind, tariffs won’t necessarily be able to reverse the deficits.
Then does
that mean they’re meant to play a major role in Trump’s overall tax policy,
allowing him to extend the income tax cuts he introduced in 2017 that need to
be renewed this year? Or to possibly turn the clock back to the 19th century,
when government was largely funded by tariff revenue? “We were at our richest
from 1870 to 1913. That’s when we were a tariff country,” Trump said in
February — a point he echoed in the Rose Garden when announcing his declaration
of economic independence this week.
But taxing
the world to reduce domestic U.S. taxes isn’t going to work. Tariffs won’t be
anywhere near enough to finance the current U.S. government — even a much
reduced one. Also, they’re far less predictable than income taxes.
So, could
the tariffs simply be meant to incentivize the re-shoring of manufacturing as
Trump promised on Wednesday, claiming “jobs and factories will come roaring
back into our country”? It’s a point Vance also emphasized in his remarks this
week — though he certainly didn’t think so in 2017, when he warned
protectionist policies would do little to bring factories and jobs back
“because of automation and because of new technological change.”
In the end,
all the reasons Trump and his top aides have cited to explain the highly
aggressive strategy — from cutting taxes to reducing deficits and re-shoring —
will make it harder for trading partners to plot what to do.
Should they
grin and bear it or strike back? Whatever they decide, friend and foe alike
will likely start piecing together a different global trade order — one that
America might like a lot less than the one it just trashed.
Your Life Will Never Be the Same After These Tariffs
Opinion
Guest Essay
Your Life
Will Never Be the Same After These Tariffs
April 4,
2025
By Justin
Wolfers
Dr. Wolfers
is a professor of economics and public policy at the University of Michigan.
https://www.nytimes.com/2025/04/04/opinion/trump-tariff-economics-cost.html
These
tariffs are going to hurt. A lot. By my calculations, this round of tariffs may
be 50 times as painful as the ones Donald Trump instituted in his first term.
That means they are going to reshape your life in much more fundamental ways.
To
illustrate how, let’s look at a prosaic example: your washing machine. In 2018,
Mr. Trump’s relatively modest tariffs caused washing machine prices to rise by
nearly $100. As a result, many families elected to stick with their aging
machines longer than they otherwise would have. But that choice incurred a new
set of costs: late-night thuds from unbalanced loads, wads of scrunched cloth
still dripping wet after a cycle and higher energy and water bills.
In other
words, the total cost of a tariff isn’t just what comes out of your checking
account. The time you spend to rearrange the stuff in your washer is a cost.
The time you spend wringing out sopping wet T-shirts is a cost. Tariffs are
costly not just because they raise prices but because they force you to make
different decisions that will extract a different kind of cost from you over
time.
Small
tariffs create small problems. Big tariffs create huge ones. Take Mr. Trump’s
25 percent tariff on vehicles, which is expected to raise their prices by
roughly $4,000. Many families, like mine, will probably decide not to buy a
second car. That creates far bigger problems than an aging washer. Now, we’re
constantly juggling how to get our kids to all their activities, and ourselves
to work, with only one set of wheels.
And it’s not
just cars. These are across-the-board tariffs, so they will distort virtually
every purchase you make. In each case you’ll have to stop your baked-in
calculations, recalibrate and find a way to make do — perhaps substituting
frozen vegetables for fresh vegetables, a less effective medication for a
higher-priced import, or corn syrup for sugar. And in each case, you’re worse
off.
By the way,
tariffs don’t distort just your buying decisions; they also distort what
businesses make. Just as tariffs lead you to buy less desirable alternatives,
they lead businesses to channel labor and capital into less desirable — that
is, less productive — activities.
The tariffs
announced on Wednesday are roughly 10 times as high as those of most other
industrialized countries, and higher than the infamous Smoot-Hawley tariffs (of
Great Depression fame).
Mr. Trump’s
latest tariffs will lead folks to rethink not only whether to replace their
washing machines — as they did in 2018 — but also their dryers, refrigerators,
stoves, groceries, clothes, cars and even everyday essentials.
Many of the
substitutions we’ll make will be quite painful. If a 1 percent tariff leads you
to switch from real guacamole to a pea-based alternative, then you really
didn’t care about guac all that much. But if it takes a 20 percent tariff to
get you to switch, that’s a sure sign that going without the real thing is a
serious hardship. And this is why higher tariffs generate a far greater amount
of pain. These forces aren’t independent of each other. They interact. Or in
math, they multiply, which means their costs rise in the square of the tariff
rate. That leads to some pretty painful arithmetic.
The average
tariff rate was about 1.5 percent just before Mr. Trump’s election in 2016. He
subsequently raised tariffs on steel, aluminum, washing machines, solar panels
and many goods from China, but left much of the rest of the economy untouched.
All told, by 2019 he roughly doubled the tariff rate, to around 3 percent — and
so effectively quadrupled whatever pain the 2016 tariffs were causing. (Yes,
two times two is four.)
Joe Biden
kept some of these tariffs, but Mr. Trump’s latest round pushes our current
rate to around 15 times its 2016 level, and so squaring that, it’s 225 times
more painful. That’s more than 50 times as large as the cost of Mr. Trump’s
first-term tariff increase.
Perhaps
voters pulled the lever for Mr. Trump with warm memories of the good economic
times. But the reality of his first term is that there was a lot more tariff
talk than action. They were barely more than a bump in the road. This time,
they’re a mountain. And so the impact will be more like a crash than last
time’s comfortable jolt.
Justin
Wolfers is a professor of economics and public policy at the University of
Michigan.
Trump Sounds Defiant Note as Tariffs Roil Markets Again
Trump
Sounds Defiant Note as Tariffs Roil Markets Again
After China
announced new retaliatory measures against the United States, President Trump
responded that Beijing “PLAYED IT WRONG.”
Tony Romm
By Tony Romm
Published
April 4, 2025
Updated
April 5, 2025, 4:37 a.m. ET
Two days
after President Trump announced his expansive global tariffs, the United States
confronted wide-ranging and painful blowback, as China retaliated against
American goods and markets plummeted again on worries of a persistent, damaging
trade war.
No portion
of the global economy appeared unscathed as the world braced for Mr. Trump to
begin imposing his nearly across-the-board taxes on imports Saturday, marking
the first salvo in a potentially costly trade conflict that the president has
vigorously defended.
China, which
Mr. Trump has already hit with 20 percent tariffs, announced plans to
retaliate. Beijing promised to impose a 34 percent tariff on American goods
next week, including on agricultural products. China calibrated its tariffs to
match Mr. Trump’s decision to add a 34 percent tax to Chinese imports.
The
tit-for-tat delivered a huge blow to financial markets, as Wall Street reckoned
with the rising odds of an escalating global trade standoff. By the closing
bell, the S&P 500 had fallen by almost 6 percent, pulling it closer into a
bear market, a widely used Wall Street term for a decline of at least 20
percent from its peak. The tech-heavy Nasdaq fell 5.8 percent, pushing it into
bear market territory.
As China
took aim at the United States, Ngozi Okonjo-Iweala, the director general of the
World Trade Organization, warned on Friday against a “cycle of retaliatory
measures that lead to further declines in trade.” In the United States, Jerome
H. Powell, the chair of the Federal Reserve, struck his own downbeat note over
the unpredictable trajectory of the economy.
“While
uncertainty remains elevated, it is now becoming clear that the tariff
increases will be significantly larger than expected,” Mr. Powell said. “The
same is likely to be true of the economic effects, which will include higher
inflation and slower growth.”
But Mr.
Trump responded to the day of chaos by striking a defiant tone. Having decamped
from Washington to Mar-a-Lago, his home in Florida, he declared on Truth
Social: “MY POLICIES WILL NEVER CHANGE.”
Instead, the
president insisted in another post that his strategy was “ALREADY WORKING,” as
he held up a newly released and better-than-expected jobs report, which
reflected that U.S. hiring increased in the month before the announcement of
his tariffs.
At one
point, the president even circulated another user’s video that argued “Trump is
purposely CRASHING the market,” in a bid to force the Fed to lower interest
rates. He later called on Mr. Powell to do just that, demanding that the
independent chair of the central bank “STOP PLAYING POLITICS.”
And Mr.
Trump eventually turned his attention to China, attacking the country for
having “PLAYED IT WRONG” by retaliating against the United States. The
president and his aides previously have signaled they could ratchet up their
tariff rates if other nations look to exact retribution on U.S. goods.
The global
scramble in many ways underscored the weight of Mr. Trump’s tariffs and the
significance of his grand aspirations to recalibrate the global trading system.
The White House sees these levies as critical toward resetting U.S. trade
relationships, which the president contends are unfair, while boosting U.S.
manufacturing and raising new revenue.
But the
tariffs, which are taxes on imports, threaten to fall hard on businesses that
could face new costs to produce their goods. That, in turn, could hammer
consumers, who are likely to shoulder the burden of any price increases.
Economists widely believe the result could be a rising rate of inflation, and a
slowdown in consumer spending and business investment, which together crimp
U.S. growth and push the economy into a recession.
“Markets are
expressing a vote of no confidence in the new tariff regime,” said Joe
Brusuelas, the principal and chief economist at the consulting firm RSM. He
added that Mr. Trump’s commentary on Friday only “adds to the consternation and
concern that there’s no strategic road map.”
But Mr.
Trump and his top aides have swatted away those dour projections in recent
days. Fanning across cable news, they have dismissed the ebb and flow of the
markets and acknowledged the possibility that tariffs could create short-term
economic pain, which the president has likened to a “sick” patient’s painful
yet necessary medical operation.
The
administration and its conservative allies have also labored to deflect
criticism from economists, repeatedly portraying them as naysayers who had
wrongly judged the president’s agenda in the past.
“I think
it’s very clear the rhetoric of the economic community, in particular, is
almost entirely ideological and out of proportion to the actual sort of
risk-reward calculation,” Oren Cass, the chief economist at American Compass, a
conservative economic think tank, said Friday.
Global
leaders, American politicians and others rejected that view, saying Mr. Trump’s
approach threatened to weaken the global economy and send prices soaring just
as much of the world was finally returning to a sense of balance after two
years of rapid inflation.
Ms.
Okonjo-Iweala, the director general of the W.T.O., warned in a statement Friday
that Mr. Trump’s policies “could lead to an overall contraction of around 1
percent in global merchandise trade volumes this year, representing a downward
revision of nearly four percentage points from previous projections.”
The State of
California signaled it would try to negotiate its own trade deals, as Gov.
Gavin Newsom, a Democrat, looked to protect local agriculture and other
businesses. In a statement, Mr. Newsom said the president’s tactics would be
felt in “pretty profound ways to real people, including those who voted for
Donald Trump and are now being betrayed by this very administration.”
Even video
games could not escape the fray: Japan’s Nintendo announced that it would delay
presales of its widely anticipated upcoming console, the Switch 2, as it cited
a need “to assess the potential impact of tariffs and evolving market
conditions.” Mr. Trump has said Japan will face a 24 percent tariff on its
exports to the United States.
Some foreign
governments also mounted a last-minute scramble to figure out how, or if, to
retaliate, while trying to persuade Washington to relax its coming taxes on
imports.
Maros
Sefcovic, the trade commissioner for the European Union, said Friday that he
had a “frank” exchange with Mr. Trump’s trade emissaries, posting on the
social-media site X, “I was clear: US tariffs are damaging, unjustified.”
Earlier
Friday, Mr. Trump said he had spoken by phone with To Lam, the general
secretary of the Communist Party of Vietnam, which stands to see a 46 percent
tariff on its exports to the United States beginning next week. By Mr. Trump’s
telling, Vietnam “wants to cut their Tariffs down to ZERO if they are able to
make an agreement with the U.S.,” though the president did not explicitly say
if he would accept such a deal.
The Trump
administration has sent mixed signals over its willingness to cut a deal: Some
of Mr. Trump’s advisers have said they do not intend to haggle, but the
president himself told reporters earlier in the week that he could be open to
negotiation if the United States received something “phenomenal” in return for
relaxing tariffs.
Reporting
was contributed by Ana Swanson, Laurel Rosenhall, Colby Smith, Zachary Small
and Keith Bradsher.
Tony Romm is
a reporter covering economic policy and the Trump administration for The Times,
based in Washington. More about Tony Romm
Investors Recoil From Trump’s Pledge to Remake the Global Economy
Investors
Recoil From Trump’s Pledge to Remake the Global Economy
Stocks
hadn’t fallen this far this fast since the early days of the coronavirus
pandemic. A 9.1 percent drop in the S&P 500 is the steepest weekly decline
since March 2020.
Joe Rennison Danielle Kaye
By Joe
Rennison and Danielle Kaye
Published
April 4, 2025
Updated
April 5, 2025, 4:01 a.m. ET
https://www.nytimes.com/2025/04/04/business/trump-stocks-tariffs-trade.html
Investors
around the globe this week sent President Trump a clear message about his new
tariff policy, announced triumphantly as a remaking of the economic order.
They don’t
like it.
The S&P
500 fell 6 percent on Friday, bringing its losses for the week to 9.1 percent.
Stocks hadn’t fallen this far this fast since the early days of the coronavirus
pandemic — it was the steepest weekly decline since March 2020.
As then, the
S&P 500 is quickly approaching bear market territory, a drop of 20 percent
from the latest high that marks extreme pessimism among investors. By Friday,
the index was down more than 17 percent from its February peak. The tech-heavy
Nasdaq Composite and the Russell 2000 index of smaller companies, which are
more sensitive to changes in the economic outlook, have both already fallen
into a bear market. Around the world, stocks have tumbled.
But this
meltdown wasn’t driven by the emergence of a new and deadly virus, or an
unforeseen housing crisis like the one that wiped out stock values in 2007 and
2008 as it triggered the worst economic crisis since the Great Depression.
It was
driven by a policy decision by the president.
“I hope that
the message that the stock market is sending to the administration is being
heard,” Ed Yardeni, a veteran market analyst, said in a television interview.
“The market is giving a big thumbs down to this tariff policy.”
Analysts and
market historians struggled to point to another time a president had directly
inflicted so much damage on the financial markets. There are some recent
parallels: An ill-timed budget proposal by Liz Truss, Britain’s prime minister
in 2022, led to days of market chaos, and she had to resign within weeks.
But Mr.
Trump has shown no interest in backing down. “MY POLICIES WILL NEVER CHANGE,”
he wrote in a social media post on Friday.
So
investors, economists and business leaders are hastily assessing the new and
unprecedented policies and the economic damage that those policies could cause.
“We are just
working through what this could possibly mean,” said Lindsay Rosner, head of
multisector fixed-income investing at Goldman Sachs Asset Management. She added
that the sheer scale of the tariffs “increases the probability of a recession.”
It’s a
remarkable turn in sentiment. After Mr. Trump was elected, and in the first
month of his administration, investors were eager to see what a pro-business
administration that had inherited a healthy economy might yield. They also
expected that the president’s impulses for radical economic change might be
contained by the stock market itself — a sudden drop might persuade him to
change course.
Despite
concerns that stocks were highly valued, they continued to climb — peaking in
February.
But even
before this week’s meltdown, data from EPFR Global showed that investors had
pulled $25 billion out of funds that invest in U.S. stocks in the two weeks
through Wednesday, when Mr. Trump announced the tariffs. Since then, J.P.
Morgan has raised its odds of a recession over the next 12 months to 60
percent, Deutsche Bank slashed its forecast for the American economy this year,
and others across Wall Street have lowered growth expectations and raised
inflation forecasts.
Investors
have also sharply raised the odds of more interest rate cuts this year,
foreseeing a need by the Federal Reserve to step in to prop up the economy. The
selling on Wall Street erased $5 trillion in market value from companies in the
S&P 500 in just two days, according to Howard Silverblatt, senior index
analyst at S&P Dow Jones Indices.
As bad as
the recent drop in the S&P 500 was, other market measures are in worse
shape. The Russell 2000 has lost a quarter of its value since its November
peak. The Nasdaq Composite, which is loaded with tech stocks that were hammered
this week, is down nearly 23 percent from its December peak.
“It’s saying
this is really bad,” said Liz Ann Sonders, chief investment strategist at
Charles Schwab. “This exceeds anything I saw on anybody’s worst-case scenario.
This did more to dent animal spirits, which had been something that had revived
in the immediate aftermath of the election.”
Dan Ivascyn,
chief investment officer of the large asset manager PIMCO, said the tariff
announcement this week represented “a massive material change to the global
trading system” and would lead to “a material shock to the global economy.”
“In recent
decades, economics has tended to drive political decisions,” he said. “We may
be entering a period where politics drives economics. That’s a very different
environment to invest in.”
Some said
Mr. Trump himself offered a precedent. In 2018, he imposed tariffs on global
steel and aluminum imports, solar panels, washing machines, and $200 billion of
goods from China. But those levies pale in comparison with what was rolled out
on Wednesday, and the effect on markets was far more muted.
Though Mr.
Trump had always promised to use tariffs again in an effort to restructure the
American economy — bringing manufacturing back within the country’s borders and
making the United States less dependent on foreign trade — the scale of the
policy shift caught investors, economists and business leaders off guard.
The new
taxes raised the average effective tariff rate on U.S. imports to a level not
seen since the 1930s, analysts at S&P, the ratings agency, said.
Some
investors hold out hope that the tariffs are just a starting point for
negotiations that will bring them down over time.
But while
Mr. Trump has suggested that he is open to negotiating tariffs with other
countries, China has already reacted by matching his additional 34 percent
tariffs. Canada swiftly introduced tariffs of its own, and Europe is also
expected to respond.
“The base
line is so high right now that even well-negotiated tariffs are going to be
high,” said Adam Hetts, global head of multi-asset at Janus Henderson
Investors. He feared that the damage had already been done.
“The damage
is done because tariffs now have teeth, and consumer and company behavior is
already starting to change,” Mr. Hetts said, echoing a fear held by other
investors, too — that the tariff talk has already chilled business and consumer
activity.
Few chief
executives have spoken out about the tariffs, but those who did expressed
alarm.
As the
tariffs were announced, Gary Friedman, the chief executive of the furniture
retailer RH, was on an earnings call with investors. He was heard cursing,
after checking RH’s share price. RH gets many of its products from Asia, Mr.
Friedman explained.
On Thursday,
Sean Connolly, the chief executive of Conagra Brands, told analysts that the
food company was trying to keep up with the sudden shifts in tariff policy.
“Things are
moving around not only on a weekly or daily basis but on an hourly basis right
now,” he said.
From the
White House, however, the message is one of exuberance — if investors just have
the patience to see it through.
“The markets
are going to boom,” and “the country is going to boom,” Mr. Trump said on
Thursday. Howard Lutnick, the secretary of commerce, said during an interview
on Thursday that “American markets are going to do extremely, extremely well”
over the longer term.
History
shows that even the worst market crisis will come to an end, once investors are
satisfied that prices have fallen far enough to reflect the new reality, or
another shift in policy gives them reason to start buying again. On Friday, a
report on hiring in March that was far stronger than expected, showing that the
economy was still on a solid footing last month, failed to stoke a market
recovery.
Business
leaders have responded to surveys saying they intend to slow plans for their
own investments. Executives at airlines, banks, retailers, energy companies and
more watched their companies’ valuations drop this week. Consumers, after
trying to get ahead of the tariffs on some big-ticket items, have said they
intend to spend less, too.
“I’m not
sure what we got gives companies a lot of confidence,” Ms. Sonders of Charles
Schwab said. “I think it doesn’t alleviate that component of uncertainty.”
Joe Rennison
writes about financial markets, a beat that ranges from chronicling the
vagaries of the stock market to explaining the often-inscrutable trading
decisions of Wall Street insiders. More about Joe Rennison
America’s Brexit? Trump’s historic gamble on tariffs has been decades in the making
Analysis
America’s
Brexit? Trump’s historic gamble on tariffs has been decades in the making
Callum Jones
in New York
Trump’s
economic assault on the world stunned economists and sent stock markets into a
spiral. Who will pay the price?
Sat 5 Apr
2025 07.00 BST
https://www.theguardian.com/us-news/2025/apr/04/trump-tariffs-economy
Donald
Trump’s vast overhaul of US trade policy this week has called time on an era of
globalization, alarming people, governments and investors around the world. No
one should have been surprised, the US president said.
The
announcement of 10% to 50% tariffs on US trading partners tanked stock markets
after Trump unveiled a “declaration of economic independence” so drastic it
drew comparison with Britain’s exit from the European Union – Brexit.
But Trump,
who won re-election promising that tariffs would make America great again, has
advocated for the return of widespread tariffs with “great consistency” for
decades. “I’ve been talking about it for 40 years,” he noted in the White House
Rose Garden.
Many
businesses, economists and politicians believe Trump’s trade plan is
wrongheaded, flawed and risky. Some have even suggested it might have been
written by ChatGPT. But he is unquestionably right when it comes to the number
of decades he has argued for it.
“This is so
unusual for Trump. He’s a conventional politician in one way: he doesn’t
believe in much deeply,” Larry Sabato, director of the Center for Politics at
the University of Virginia. Tariffs are different. “This one thing, he seems to
deeply believe in.”
As far back
as 1987, when a fame-hungry real estate tycoon took out full-page ads in
newspapers, the now president called for such a strategy. Other major economies
are the “greatest profit machines ever created”, he argued way back when.
“‘Tax’ these wealthy nations, not America.”
Eight years
after the start of his first term and just 10 weeks into his second, he has
finally set about seriously delivering that dream – and cast aside warnings it
may deteriorate into a nightmare.
On the
campaign trail last year, Trump made no secret of his vision: tariffs would
unshackle the US economy, he promised, revitalize its industrial heartlands and
unlock a gigantic financial windfall for the federal government.
But after
pitching this big, beautiful and bold reconstruction of the global economic
order, the early actions of the second Trump administration were strikingly
smaller, messier and altogether more hesitant than trailed.
The focus,
at first, narrowed dramatically from the world to just a handful of nations:
China, Canada and Mexico. While China was hit hard, sweeping tariffs on Canada
and Mexico were interrupted by a dizzying array of deadlines, delays and
dispensations.
Tariffs were
increased on steel and aluminum. But Trump’s trade agenda was largely
characterized by threats and spats: rhetoric, but not reality.
On
Wednesday, dubbed “liberation day” by Trump and his aides, he did his best to
draw a sharp line under weeks of wavering, doubt and confusion – and imposed
the universal and “reciprocal” tariffs he pledged so many times to introduce
while fighting to regain the White House.
Defying the
stark forecasts and concerns of mainstream economists and corporations, Trump
went with his gut. “That was true of the Brexiteers, was it not? They really
believed it deeply from the core of their souls,” said Sabato.
At one point
during his address, Trump switched from president to historian. “In 1913, for
reasons unknown to mankind, they established the income tax,” he said, setting
the stage for a sharp reduction in tariffs on foreign goods. “Citizens, rather
than foreign countries, would start paying the money necessary to run our
government.”
Decades of
US prosperity “came to a very abrupt end” with the Great Depression from 1929,
Professor Trump opined before his class of aides, cabinet secretaries and
supporters. “It would have never happened if they had stayed with the tariff
policy,” he claimed. “It would have been a much different story.”
Actual
historians took issue with this account. “It’s what we would call a lie. False.
Not true,” said Andrew Cohen, professor of history in the Maxwell School at
Syracuse University. “He’s wrong. No one thinks that. Even conservative
economists don’t think that. Even protectionist economists don’t think that.”
Months into
the depression, the Smoot-Hawley Tariff Act of 1930 – which hiked tariffs on
hundreds of imports in a bid to boost the US economy – is widely considered to
have prolonged, and even deepened, the crisis. No other president has tried the
same tactic again – until now.
The swift
rebuttal to Trump’s analysis of the past was surpassed only by the response to
his ambitious predictions for the future.
The
president has promised a new Golden Age, with millions of new jobs, billions
more dollars’ worth of US exports and trillions of dollars in tariff revenues.
Outside his administration, skepticism is high.
“The Trump
tariffs mark a liberation from the benefits of free trade for American
businesses and consumers,” said Eswar Prasad, professor of trade policy at
Cornell University, and a former official at the International Monetary Fund.
“Trump has taken the hatchet to trade with practically every major US trading
partner, sparing few allies or rivals,” he added, with action that will be
“severely disruptive to the US economy, with the effects felt by American
consumers and businesses in practically every industry”.
Who pays the
price? The rest of the world, according to the president and his aides. But
import tariffs are paid by the companies and consumers that import the goods
from the rest of the world – in this case, US companies and consumers – rather
than the overseas companies exporting them.
Trump’s
tariffs will increase the average US household’s costs by $3,800, according to
the Yale Budget Lab.
“These
tariff increases are likely to be some of the biggest tax increases in US
history and will result (if fully implemented) in some of the highest tariff
rates the US has ever seen,” wrote Jeremy Horpedahl, adjunct scholar at the
libertarian Cato Institute, who noted that they could exceed the
post-Smoot-Hawley levels of 1930.
“Like all
tariffs, some large portion of these new levies will be paid by US consumers
and businesses in the form of higher prices,” added Horpedahl.
If Trump is
right, and his decades-old dream revives the world’s largest economy, enriching
its citizens and transforming its industrial base into a manufacturing
powerhouse, his administration will be one of the most successful in modern
memory.
But if he’s
wrong, the very Americans who elected him to rapidly bring down the cost of
living are likely to be hit hardest.
“It’s either
going to be Trump and his team or it’s going to be a large majority of
experienced mainstream economists,” said Sabato. “I know where my bet is.”
Trump tariffs come into effect in ‘seismic’ shift to global trade
.jpeg)
Trump
tariffs come into effect in ‘seismic’ shift to global trade
‘Baseline’
10% import levy takes effect at US seaports, airports and customs warehouses on
Saturday, with some higher tariffs to begin next week
Reuters
Sat 5 Apr
2025 06.26 BST
US customs
agents began collecting President Donald Trump’s unilateral 10% tariff on all
imports from many countries on Saturday, with higher levies on goods from 57
larger trading partners due to start next week.
The initial
10% “baseline” tariff took effect at US seaports, airports and customs
warehouses at 12.01am ET (0401 GMT), ushering in Trump’s full rejection of the
post-second world war system of mutually agreed tariff rates.
“This is the
single biggest trade action of our lifetime,” said Kelly Ann Shaw, a trade
lawyer at Hogan Lovells and former White House trade adviser during Trump’s
first term.
Shaw told a
Brookings Institution event on Thursday that she expected the tariffs to evolve
over time as countries sought to negotiate lower rates. “But this is huge. This
is a pretty seismic and significant shift in the way that we trade with every
country on Earth.”
Trump’s
Wednesday tariff announcement shook global stock markets to their core, wiping
out $5tn in stock market value for S&P 500 companies by Friday’s close, a
record two-day decline. Prices for oil and commodities plunged, while investors
fled to the safety of government bonds.
Among the
countries first hit with the 10% tariff are Australia, the UK, Colombia,
Argentina, Egypt and Saudi Arabia. A US Customs and Border Protection bulletin
to shippers indicates no grace period for cargoes on the water at midnight on
Saturday.
But a
bulletin from the agency did provide a 51-day grace period for cargoes loaded
onto vessels or planes and in transit to the US before 12.01am ET Saturday.
These cargoes need arrive to by 12.01am ET on 27 May to avoid the 10% duty.
At the same
hour on Wednesday, Trump’s higher “reciprocal” tariff rates of 11% to 50% are
due to take effect. European Union imports will be hit with a 20% tariff, while
Chinese goods will be hit with a 34% tariff, bringing Trump’s total new levies
on China to 54%.
Vietnam,
which benefited from the shift of US supply chains away from China after
Trump’s first-term trade war with Beijing, will be hit with a 46% tariff and
agreed on Friday to discuss a deal with Trump.
Canada and
Mexico were exempt from both 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.
Trump is
excluding goods subject to separate, 25% national security tariffs, including
steel and aluminium, cars, trucks and auto parts.
His
administration also released a list of more than 1,000 product categories
exempted from the tariffs. Valued at $645bn in 2024 imports, these include
crude oil, petroleum products and other energy imports, pharmaceuticals,
uranium, titanium, lumber and semiconductors and copper.
Except for
energy, the Trump administration is investigating several of these sectors for
further national security tariffs.
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