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Trump U-turns on tariffs but keeps trade war heat on China

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U.S. President Donald Trump’s stunning decision to pause the hefty duties he had just imposed on dozens of countries sent battered global stock markets surging on Thursday even as he ratcheted up a trade war with the world’s No. 2 economy China.

Trump’s turnabout on Wednesday, which came less than 24 hours after steep new tariffs kicked in on most trading partners, followed the most intense episode of financial market volatility since the early days of the COVID-19 pandemic, Reuters reported.

The upheaval erased trillions of dollars from stock markets and led to an unsettling surge in U.S. government bond yields that appeared to catch Trump’s attention.

“I thought that people were jumping a little bit out of line, they were getting yippy, you know,” Trump told reporters after the announcement, referring to jitters sportpeople sometimes get.

U.S. stock indexes shot higher on the news, with the benchmark S&P 500 index closing 9.5% higher. Bond yields came off earlier highs and the dollar rebounded against safe-haven currencies.

The relief spread through Asian markets as they opened on Thursday with Japan’s Nikkei index surging 8% while European futures also pointed to a sharp rebound. Even Chinese stocks rose, propped up by hopes of state support, although its yuan currency fell to the lowest level since the global financial crisis.

Since returning to the White House in January, Trump has repeatedly threatened an array of punitive measures on trading partners, only to revoke some of them at the last minute. The on-again, off-again approach has baffled world leaders and spooked business executives.

U.S. Treasury Secretary Scott Bessent asserted that the pullback had been the plan all along to bring countries to the bargaining table. Trump, though, later indicated that the near-panic in markets that had unfolded since his April 2 announcements had factored in to his thinking.

Despite insisting for days that his policies would never change, he told reporters on Wednesday: “You have to be flexible.”

But he kept the pressure on China, the second biggest provider of U.S. imports. Trump said he would raise the tariff on Chinese imports to 125% immediately from the 104% level that took effect at midnight.

Beijing on Wednesday slapped 84% tariffs on U.S. imports to match Trump’s earlier tariff salvo and has vowed to “fight to the end” in an escalating tit-for-tat trade dispute between the world’s top two economies.

Chinese companies that sell products on Amazon are preparing to hike prices for the U.S. or quit that market due to the “unprecedented blow” from the tariff hikes, the head of China’s largest e-commerce association said.

‘GOADED CHINA’

Trump’s reversal on the tariffs imposed on other countries is also not absolute. A 10% blanket duty on almost all U.S. imports will remain in effect, the White House said. The announcement also does not appear to affect duties on autos, steel and aluminum that are already in place.

The 90-day freeze also does not apply to duties paid by Canada and Mexico, because their goods are still subject to 25% fentanyl-related tariffs if they do not comply with the U.S.-Mexico-Canada trade agreement’s rules of origin. Those duties remain in place for the moment, with an indefinite exemption for USMCA-compliant goods.

Trump’s tariffs had sparked a days-long selloff that erased trillions of dollars from global stocks and pressured U.S. Treasury bonds and the dollar, which form the backbone of the global financial system. Canada and Japan said they would step in to provide stability if needed – a task usually performed by the United States during times of economic crisis.

Analysts said the sudden spike in share prices might not undo all of the damage. Surveys have found slowing business investment and household spending due to worries about the impact of the tariffs, and a Reuters/Ipsos survey found that three out of four Americans expect prices to increase in the months ahead.

Goldman Sachs cut its probability of a recession back to 45% after Trump’s move, down from 65%, saying the tariffs left in place were still likely to result in a 15% increase in the overall tariff rate.

Treasury Secretary Bessent shrugged off questions about market turmoil and said the abrupt reversal rewarded countries that had heeded Trump’s advice to refrain from retaliation. He suggested Trump had used the tariffs to create maximum negotiating leverage. “This was his strategy all along,” Bessent told reporters. “And you might even say that he goaded China into a bad position.”

Bessent is the point person in the country-by-country negotiations that could address foreign aid and military cooperation as well as economic matters. Trump has spoken with leaders of Japan and South Korea, and a delegation from Vietnam met with U.S. officials on Wednesday to discuss trade matters, the White House said.

Bessent declined to say how long negotiations with the more than 75 countries that have reached out might take.

Trump said a resolution with China was possible as well. But officials have said they will prioritize talks with other countries.

“China wants to make a deal,” Trump said. “They just don’t know how quite to go about it.”

Trump told reporters that he had been considering a pause for several days. On Monday, the White House denounced a report that the administration was considering such a move, calling it “fake news.”

Earlier on Wednesday, before the announcement, Trump tried to reassure investors, posting on his Truth Social account, “BE COOL! Everything is going to work out well. The USA will be bigger and better than ever before!”

Later, he added: “THIS IS A GREAT TIME TO BUY!!!”

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Putin, Trump to skip Ukraine’s peace talks that Russian leader proposed

Zelenskiy backs an immediate 30-day ceasefire, but Putin has said he first wants to start talks at which the details of such a ceasefire could be discussed.

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U.S. President Donald Trump and Russian President Vladimir Putin indicated they would not attend what could be the first direct peace talks between Moscow and Kyiv in three years on Thursday, with the Kremlin sending instead a group of experienced technocrats, Reuters reported.

Putin on Sunday proposed direct negotiations with Ukraine in Istanbul on Thursday “without any preconditions”. Late on Wednesday, the Kremlin said the delegation would include presidential adviser Vladimir Medinsky and Deputy Defence Minister Alexander Fomin – but Putin’s name was not on the list.

After the Kremlin’s delegation announcement, a U.S. official said Trump, who is on a three-nation tour of the Middle East, would not attend. The U.S. leader had said earlier that he was considering the option to participate.

While Putin had never confirmed he would attend in person, the absence of the Russian and U.S. presidents lowers the expectations for a major breakthrough in the war that Russia started in February 2022.

Ukrainian President Volodymyr Zelenskiy had challenged Putin to attend the talks “if he’s not afraid,” in an apparent contest to show Trump who wants peace more, Ukraine or Russia.

While the Kyiv leader was on his way to Turkey late on Wednesday, a Ukrainian official said, he had said he would take part in the talks only if Putin attended.

In his nightly video address on Wednesday Zelenskiy said that Ukraine would decide on its steps for peace talks in Turkey once there was clarity on Putin’s participation.

“The answers to all questions about this war – why it started, why it continues – all these answers are in Moscow,” Zelenskiy said. “How the war will end depends on the world.”

Trump wants the two sides to sign up to a 30-day ceasefire to pause Europe’s biggest land war since World War Two, and a Russian lawmaker said on Wednesday there could also be discussions about a huge prisoner of war exchange, read the report.

Zelenskiy backs an immediate 30-day ceasefire, but Putin has said he first wants to start talks at which the details of such a ceasefire could be discussed.

Trump, who is growing increasingly frustrated with both Russia and Ukraine as he tries to push them towards a peace settlement, said he was “always considering” secondary sanctions against Moscow if he thought it was blocking the process.

U.S. officials have spoken about possible financial sanctions as well as potential secondary sanctions on buyers of Russian oil.

The U.S. delegation to Turkey included Secretary of State Marco Rubio and senior envoys Steve Witkoff and Keith Kellogg.

Ukrainian Foreign Minister Andrii Sybiha said early on Thursday he had met with Rubio to share Zelenskiy’s peace vision and “coordinate positions during this critical week.”

Medinsky and Fomin, part of the Russian delegation, took part in the last set of negotiations between the two sides in the first weeks of the war. Other senior military and intelligence officials were also part of the Thursday delegation.

Direct talks between negotiators from Ukraine and Russia last took place in Istanbul in March 2022, a month after Putin sent tens of thousands of troops into Ukraine in what he calls a “special military operation” to root out neo-Nazis, Reuters reported.

Ukraine and its allies say the invasion was an unprovoked, imperial-style land grab.

With Russian forces grinding forward in Ukraine and now controlling about a fifth of the country, the Kremlin chief has offered few, if any, concessions so far. In his proposal at the weekend, he said that the talks in Turkey would be aimed at a durable peace.

He specifically mentioned the 2022 talks and the failed draft deal.

Under that deal, among others, Ukraine would have agreed to permanent neutrality in return for security guarantees from the five permanent members of the U.N. Security Council: Britain, China, France, Russia and the United States, and other nations including Belarus, Canada, Germany, Israel, Poland and Turkey, according to a draft seen by Reuters.

But officials in Kyiv say agreeing to Ukrainian neutrality is a red line they will not cross.

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Israel intensifies Gaza bombardment, kills 80 people, as Trump visits Gulf

Witnesses and medics said shortly after the evacuation orders Israeli planes carried several airstrikes against targets within Gaza City.

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Israeli military strikes killed at least 80 Palestinians across the Gaza Strip on Wednesday, local health authorities said, in an intensification of the bombardment as U.S. President Donald Trump visits the Middle East, Reuters reported.

Medics said most of the dead, including women and children, were killed in a barrage of Israeli airstrikes on houses in the Jabalia area of northern Gaza.

Later on Wednesday, the Israeli military issued new evacuation orders to people in several districts in Gaza City, forcing thousands of Palestinians to leave their shelters.

The areas threatened by the evacuation warnings included several schools and the largest Shifa Hospital, according to a map published by the Israeli army.

Witnesses and medics said shortly after the evacuation orders Israeli planes carried several airstrikes against targets within Gaza City.

“Some victims are still on the road and under the rubble where rescue and civil emergency teams can’t reach (them),” the health ministry statement said.

Israel’s military had no immediate comment. It said it was trying to verify the reports.

Reuters television footage showed residents returning to the ruins of their homes. Some sifted through the remains of walls and furniture, looking for documents and belongings.

“They fired two rockets, they told us the house of Moqbel (had been hit),” said Hadi Moqbel, who lost relatives in the attack in Jabalia. “We came running, we saw body parts on the ground, children killed, the woman killed and a baby killed – his head was exploded like a flower. He was two months old.”

Israeli press reports on Wednesday cited security officials as saying they believed Hamas military leader Mohammad Sinwar and other senior officials had been killed in a strike on Tuesday on what the Israeli military described as a command and control bunker under the European Hospital in the southern Gaza city of Khan Younis, read the report.

There was no confirmation by the Israeli military or Hamas. On Wednesday, witnesses and medics said an Israeli airstrike hit a bulldozer that approached the area of the strike at the European Hospital, wounding several people.

Late on Tuesday, Islamic Jihad, an Iranian-backed militant group allied with Hamas, fired rockets from Gaza towards Israel. Shortly before Israel hit back, its military issued evacuation orders to residents in the area of Jabalia and nearby Beit Lahiya.

Palestinians hope Trump’s visit to Saudi Arabia, Qatar and the United Arab Emirates will provide pressure for a reduction of violence. Hamas on Monday released Edan Alexander, the last known living American hostage it had been holding.

Trump said in Riyadh on Tuesday that more hostages would follow Alexander and that the people of Gaza deserved a better future. He is not visiting Israel during his Middle East trip.

Ceasefire efforts have faltered. Hamas talked to the United States and Egyptian and Qatari mediators to arrange Alexander’s release, and Israel has sent a team to Doha to begin a new round of talks.

On Tuesday, Trump’s special envoys Steve Witkoff and Adam Boehler met hostage families in Tel Aviv and said they saw a better chance of an agreement for the hostages’ release following the deal over Alexander, read the report.

Hamas said on Wednesday the continued attacks indicated that Israeli Prime Minister Benjamin Netanyahu wanted to “escalate the aggression and massacres against civilians to undermine those (ceasefire) efforts”. Israel has blamed Hamas for the continuing war.

The U.S. has presented a plan to reopen humanitarian aid deliveries in Gaza using private contractors. Israel, which imposed a total blockade of supplies going into Gaza from March 2, has endorsed the plan but it has been rejected by the United Nations and international aid agencies.

Israel invaded Gaza in retaliation for the Hamas-led attack on southern Israeli communities on October 7, 2023, in which about 1,200 people were killed and 251 were taken as hostages to Gaza, according to Israeli tallies.

Israel’s military campaign has killed more than 52,900 Palestinians, according to local health officials. It has left Gaza on the brink of famine, aid groups and international agencies say.

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Trump offers to join potential Russia-Ukraine talks in Turkey

Putin and Zelenskiy have not met since December 2019 – over two years before Russia launched its full-scale invasion of Ukraine – and make no secret of their contempt for each other.

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U.S. President Donald Trump offered on Monday to join prospective Ukraine-Russia talks in Turkey later this week as European countries pushed to get the Kremlin to accept their demand for a 30-day ceasefire in the war in Ukraine, Reuters reported.

Trump spoke a day after Ukrainian President Volodymyr Zelenskiy, in a fresh twist to the stop-start peace talks process, said he would travel to Istanbul where, he said, he would be waiting to meet Russian counterpart Vladimir Putin.

Trump told reporters at the White House that talks in Istanbul could be helpful and he might join them on Thursday while in the region. His current schedule has him visiting Saudi Arabia, the United Arab Emirates and Qatar this week.

“I’ve got so many meetings, but I was thinking about actually flying over there. There’s a possibility of it, I guess, if I think things can happen, but we’ve got to get it done,” he said before departing for his second foreign trip since his second term in the White House began in January, read the report.

“Don’t underestimate Thursday in Turkey,” Trump said.

Later, in his nightly video address, the Ukrainian president noted that Russian attacks had continued on the front lines throughout the day, and Moscow still had not responded to his call for Putin to meet him for talks in Turkey later in the week.

“Russian shelling and assaults continue,” Zelenskiy said. “Moscow has remained silent all day regarding the proposal for a direct meeting. A very strange silence.”

Diplomatic contacts were renewed.

Zelenskiy and Turkish President Tayyip Erdogan discussed the proposed direct talks which Zelenskiy said “may help end the war”. Erdogan described the proposed meeting as a new window of opportunity which was not to be squandered.

Russian Foreign Minister Sergei Lavrov spoke by telephone with his Turkish counterpart Hakan Fidan about Putin’s proposed talks with Ukraine on Thursday. But a brief Russian foreign ministry account gave no indication whether Putin would accept Zelenskiy’s proposal to meet him, Reuters reported.

Earlier on Monday, the German government said Europe would start preparing new sanctions against Russia unless the Kremlin by the end of the day started abiding by a 30-day ceasefire in its war with Ukraine.

Ukraine’s military said Russia had conducted dozens of attacks along the front in eastern Ukraine on Monday as well as an overnight assault using more than 100 drones, despite the ceasefire proposal by Europe and Kyiv.

“The clock is ticking,” a German government spokesperson said at a news conference in Berlin.

Russian Foreign Ministry spokeswoman Maria Zakharova said the 30-day ceasefire had been put forward by European countries “in order to provide a breather for Kyiv to restore its military potential and continue its confrontation with Russia.”

It is unclear, though, how much impact fresh European sanctions would have on Russia, especially if the United States does not join in as well.

The leaders of four major European powers travelled to Kyiv on Saturday and demanded an unconditional 30-day ceasefire from Monday. Putin, implicitly rejecting the offer, instead proposed direct Russia-Ukraine talks in Istanbul that he said could potentially lead to a ceasefire, read the report.

Putin and Zelenskiy have not met since December 2019 – over two years before Russia launched its full-scale invasion of Ukraine – and make no secret of their contempt for each other.

Responding to the ceasefire proposal, Russia said at the weekend it is committed to ending the war but that European powers were using the language of confrontation.

Ukrainian Foreign Minister Andrii Sybiha said Russia was “completely ignoring” the ceasefire initiative, citing what he said were continued attacks on Ukrainian forces.

He said he shared information about the continued fighting with European partners and U.S. Secretary of State Marco Rubio on a joint phone call. The allies had agreed sanctions would be needed to pressure Russia if it snubbed the truce move.

Russia and Ukraine are both trying to show Trump they are working towards his objective of reaching a rapid peace in Ukraine, while trying to make the other look like the spoiler to his efforts.

The Ukrainian military’s general staff said that as of 10 p.m. (1900 GMT) on Monday there had been 133 clashes with Russian forces along the front line since midnight, when the ceasefire was to have come into effect.

Ukraine’s top commander, Oleksander Syrskyi, was quoted by Zelenskiy as saying the heaviest fighting still gripped the Donetsk region, the focus of the eastern front, and Russia’s western Kursk region, nine months after Kyiv’s forces staged a cross-border incursion.

The fighting was at the same intensity it would be if there were no ceasefire, said Viktor Trehubov, a spokesperson for the military on Ukraine’s eastern front.

Kyiv is desperate to unlock more of the U.S. military backing it received from Trump’s predecessor, Joe Biden. Moscow senses an opportunity to get relief from a barrage of economic sanctions and engage with the world’s biggest economy.

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