World
Trump U-turns on tariffs but keeps trade war heat on China
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!!!”
World
Hong Kong tycoon Jimmy Lai sentenced to 20 years in jail in national security trial
Hong Kong’s most prominent media tycoon Jimmy Lai was sentenced on Monday to a total of 20 years in jail on national security charges comprising two counts of conspiracy to collude with foreign forces and one of publishing seditious materials.
The sentence ends a legal saga spanning almost five years, and Hong Kong’s most high-profile national security hearing. Lai, founder of the now-shuttered Apple Daily newspaper, was first arrested in August 2020 and convicted last year, Reuters reported.
Lai’s sentence of 20 years was within the most severe penalty “band” of 10 years to life imprisonment for offences of a “grave nature”.
The Hong Kong court said Lai’s sentence was enhanced by the fact that he was “mastermind” and driving force behind foreign collusion conspiracies.
The 78-year-old, a British citizen, has denied all the charges against him, saying in court he is a “political prisoner” facing persecution from Beijing.
Lai’s plight has been criticised by global leaders, opens new tab including U.S. President Donald Trump and British Prime Minister Keir Starmer, spotlighting a years-long national security crackdown in the China-ruled Asian financial hub, following mass pro-democracy protests in 2019.
“The rule of law has been completely shattered in Hong Kong. Today’s egregious decision is the final nail in the coffin for freedom of the press in Hong Kong,” said Jodie Ginsberg, CEO of the Committee to Protect Journalism.
“The international community must step up its pressure to free Jimmy Lai if we want press freedom to be respected anywhere in the world.”
Lai arrived to court in a white jacket, with hands held together in a praying gesture as he smiled and waved at supporters.
The case has drawn calls for the long-standing critic of the Chinese Communist Party, who friends and supporters say is in frail health, to be freed.
“The harsh 20-year sentence against 78-year-old Jimmy Lai is effectively a death sentence,” said Elaine Pearson, Asia Director of Human Rghts Watch. “A sentence of this magnitude is both cruel and profoundly unjust.”
Dozens of Lai’s supporters queued for several days to secure a spot in the courtroom, with scores of police officers, sniffer dogs and police vehicles including an armoured truck and a bomb disposal van deployed around the area.
“I feel that Mr. Lai is the conscience of Hong Kong,” said a man named Sum, 64, who was in the queue.
“He speaks up for Hong Kong people, and even for many wrongful cases in mainland China and for the development of democracy. So I feel that spending a few days of my own freedom sleeping out here is better than seeing him locked up inside.”
Starmer raised the case of Lai, who holds British citizenship, in detail during a tête-à-tête with Chinese leader Xi Jinping last month in Beijing’s Great Hall of the People, according to people briefed on the discussions. Britain’s national security adviser, Jonathan Powell, and China’s foreign minister, Wang Yi, were also present.
“I raised the case of Jimmy Lai and called for his release,” Starmer told the UK parliament after his trip.
Trump too, raised Lai’s case with Xi during a meeting last October. Several Western diplomats told Reuters that negotiations to free Lai would likely begin in earnest after he is sentenced, and depending on whether Lai will appeal.
LIFE IN PRISON?
Lai’s family, lawyer, supporters and former colleagues have warned that he could die in prison as he suffers from health conditions including heart palpitations and high blood pressure.
Besides Lai, six former senior Apple Daily staffers, an activist and a paralegal will also be sentenced.
“Jimmy Lai’s trial has been nothing but a charade from the start and shows total contempt for Hong Kong laws that are supposed to protect press freedom,” said the Committee to Protect Journalists’ Asia-Pacific Director Beh Lih Yi.
Beijing, however, says Lai has received a fair trial and all are treated equally under the national security law that has restored order to the city.
World
Trump signs order threatening tariffs on nations doing business with Iran
U.S. President Donald Trump signed an executive order on Friday that may impose a 25% tariff on countries that do business with Iran.
The order comes as tensions between Iran and U.S. continue to simmer even as the two countries engaged in talks this week.
World
Trump rejects Putin offer of one-year extension of New START deployment limits
U.S. President Donald Trump on Thursday rejected an offer from his Russian counterpart to voluntarily extend the caps on strategic nuclear weapons deployments after the treaty that held them in check for more than two decades expired.
“Rather than extend “New START … we should have our Nuclear Experts work on a new, improved and modernized Treaty that can last long into the future,” Trump wrote in a post on his Truth Social platform, Reuters reported.
Arms control advocates warn that the expiration of the treaty will fuel an accelerated nuclear arms race, while U.S. opponents say the pact constrained the U.S. ability to deploy enough weapons to deter nuclear threats posed by both Russia and China.
Trump’s post was in response to a proposal by Russian President Vladimir Putin for the sides to adhere for a year to the 2010 accord’s limit of 1,550 warheads on 700 delivery systems — missiles, aircraft and submarines.
New START was the last in a series of arms control treaties between the world’s two largest nuclear weapons powers dating back more than half a century to the Cold War. It allowed for only a single extension, which Putin and former U.S. President Joe Biden agreed to for five years in 2021.
In his post, Trump called New START “a badly negotiated deal” that he said “is being grossly violated,” an apparent reference to Putin’s 2023 decision to halt on-site inspections and other measures designed to reassure each side that the other was complying with the treaty.
Putin cited U.S. support for Ukraine’s battle against Russia’s 2022 full-scale invasion as the reason for his decision.
White House spokeswoman Karoline Leavitt told reporters that the U.S. would continue talks with Russia.
BOTH SIDES SIGNAL OPENNESS TO TALKS
Earlier, Kremlin spokesman Dmitry Peskov said Russia was still ready to engage in dialogue with the U.S. if Washington responded constructively to Putin’s proposal.
“Listen, if there are any constructive replies, of course we will conduct a dialogue,” Peskov told reporters.
The UN has urged both sides to restore the treaty.
Besides setting numerical limits on weapons, New START included inspection regimes experts say served to build a level of trust and confidence between the nuclear adversaries, helping make the world safer.
If nothing replaces the treaty, security analysts see a more dangerous environment with a higher risk of miscalculation. Forced to rely on worst-case assumptions about the other’s intentions, the U.S. and Russia would see an incentive to increase their arsenals, especially as China plays catch-up with its own rapid nuclear build-up.
Trump has said he wants to replace New START with a better deal, bringing in China. But Beijing has declined negotiations with Moscow and Washington. It has a fraction of their warhead numbers – an estimated 600, compared to around 4,000 each for Russia and the U.S.
Repeating that position on Thursday, China said the expiration of the treaty was regrettable, and urged the U.S. to resume dialogue with Russia on “strategic stability.”
UNCERTAINTY OVER TREATY EXPIRY DATE
There was confusion over the exact timing of the expiry, but Peskov said it would be at the end of Thursday.
Russia’s Foreign Ministry said Moscow’s assumption was that the treaty no longer applied and both sides were free to choose their next steps.
It said Russia was prepared to take “decisive military-technical countermeasures to mitigate potential additional threats to national security” but was also open to diplomacy.
That warning was in apparent response to the possibility that Trump could expand U.S. nuclear deployments by reversing steps taken to comply with New START, including reloading warheads on intercontinental ballistic missiles and submarine-launched missiles from which they were removed.
A bipartisan congressionally appointed commission in 2023 recommended that the U.S. develop plans to reload some or all of its reserve warheads, saying the country should prepare to fight simultaneous wars with Russia and China.
Ukraine, which has been at war with Russia since Moscow’s 2022 invasion, said the treaty’s expiry was a consequence of Russian efforts to achieve the “fragmentation of the global security architecture” and called it “another tool for nuclear blackmail to undermine international support for Ukraine.”
Strategic nuclear weapons are the long-range systems that each side would use to strike the other’s capital, military and industrial centres in the event of a nuclear war. They differ from so-called tactical nuclear weapons that have a lower yield and are designed for limited strikes or battlefield use.
If left unconstrained by any agreement, Russia and the U.S. could each, within a couple of years, deploy hundreds more warheads, experts say.
“Transparency and predictability are among the more intangible benefits of arms control and underpin deterrence and strategic stability,” said Karim Haggag, director of the Stockholm International Peace Research Institute.
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