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Hamish McRae

Donald Trump can be sensible

We’ve learnt three things about the future of world trade from the temporary reprieve over tariffs that the US has given China – and China’s response to it.  One is the markets are now confident that both countries will be sensible. The massively negative reaction they gave to ‘liberation day’ on 2 April signalled their hatred of uncertainty but also of stupidity. Before Donald Trump’s arbitrary jacking up of tariffs to what were really absurd levels, they had assumed that he would ensure that there would be reasonable continuity of world trade. His plans, and China’s robust reaction, led to nagging doubts that their assumption might be wrong, there really

Spotlight

Featured economics news and data.

Ross Clark Ross Clark

No, Ed Miliband: zonal pricing won’t cut energy bills

Is Ed Miliband going to announce a move towards a zonal electricity market, where wholesale prices would vary between regions of Britain? It would appear to be on cards following the Energy and Climate Secretary’s interview on the Today programme in which he said he was considering the idea. Miliband’s apparent support for the plan follows intense lobbying by Greg Jackson, CEO of Octopus Energy as well as support from the National Energy System Operator (NESO), the new government-owned company which oversees the grid. However, zonal pricing is bitterly opposed by others in the energy industry, including Chris O’Shea, the generously-moustached CEO of Centrica, and Dale Vince, CEO of Electrocity

Thursday

Matthew Lynn

Donald Trump has got what he wanted

Donald Trump has peered into the abyss. The US President watched the Wall Street meltdown and the global trading system (from which America benefits as much as anyone) start to collapse, and he hit pause. The conventional narrative will be that Trump has blinked, but I think he simply got what he wanted. Yesterday’s decision to put a 90-day pause on reciprocal tariffs, while increasing the rate on China to 125 per cent, has certainly come as a relief to the markets. The S&P500 was up almost 9 per cent on the news. Investors can breathe again. It would be easy to argue that President Trump has simply chickened out

William Moore William Moore

Trump shock, cousin marriage & would you steal from a restaurant?

39 min listen

This week: Trump’s tariffs – madness or mastermind? ‘Shock tactics’ is the headline of our cover article this week, as deputy editor Freddy Gray reflects on a week that has seen the US President upend the global economic order, with back and forth announcements on reciprocal and retaliatory tariffs. At the time of writing, a baseline 10% on imports stands – with higher tariffs remaining for China, Mexico and Canada. The initial announcement last week had led to the biggest global market decline since the start of the pandemic, and left countries scrambling to react, whether through negotiation or retaliation. China announced a second wave of retaliatory tariffs – to

Wednesday

Matthew Lynn

The EU is making a big mistake by retaliating against Trump

A Harley-Davidson will cost you a little more in France; Florida orange juice will be more expensive in Germany and American soybeans will go up in price everywhere across Europe. The European Union has decided to start taking the fight back to President Trump with a round of retaliatory tariffs. The trouble is, it is making a big mistake. Sure, we can all understand the desire to stand up to what it sees as bullying. But it is not going to win this battle.  In the wake of President Trump’s decision to impose a 20 per cent tariff on everything the EU sells in the United States, some form of

Michael Simmons Michael Simmons

Xi escalates China’s trade war with Trump

China has announced it will impose 84 per cent tariffs on US goods imports from tomorrow, as the war of words and levies between the world’s two largest economies escalates. The new measures –  50 per cent on top of the 34 per cent already imposed by Beijing’s finance ministry – are a like for like increase for the 50 per cent increase levied by Trump overnight, taking the US’s total tariff on Chinese goods to 104 per cent. The FTSE100 – which was already down more than 2.3 per cent this morning – plunged even further to 3.6 per cent following the midday news.  Beijing had vowed a ‘firm

Chris Bayliss

Tinkering with the electric car mandate won’t help manufacturers

Presumably, some future government will have to reverse the ban on the sale of new petrol and diesel vehicles in Britain. The country quite obviously lacks anything like the necessary charging infrastructure for a wholesale switch to electric for the national vehicle fleet in the foreseeable future. Let alone sufficient generation capacity at peak times. But if or when they do, those future vehicles will now have to be manufactured abroad. The 2030 deadline was first announced by Boris Johnson in 2020, and UK car makers began grandfathering the plant and production lines for new internal combustion engine (ICE) vehicles in the wake of that decision. If the 2030 deadline

Matthew Lynn

The hidden logic behind Trump’s market meltdown

Donald Trump’s announcement of huge levies on all the US’s major trading partners has triggered a global stock market meltdown, which may soon be followed by a full-blown recession. Almost no mainstream economist, and certainly none who believes in free markets and free trade, has a good thing to say about Trump’s tariffs. Yet there is a hidden logic behind the policy. It is not as completely brainless as it might appear. In fact, there are six reasons why the tariffs could make sense.  First, they may well be an effective battering ram for taking down tariff and trade barriers globally. No one seriously disputes that the American market is

Tuesday

Matthew Lynn

Is the worst of the market crash over?

The FTSE-100 is up by a couple of hundred points. Germany’s DAX has added 400 points, and in Tokyo the Nikkei 225 rose by 6 per cent overnight. After the wild trading ever since President Trump announced the imposition of huge tariffs on all of America’s major trading partners, some stability appears to have returned to the financial markets. Is the worst of the slump over? It is far too early to predict that with any confidence – but there are two reasons for thinking it might be. It remains to be seen how the markets unfold over the next few days. There could well be a bankruptcy or two

Alexander Kolyandr

Russia can’t escape the fallout of Trump’s tariff war

When Donald Trump unveiled his table of tariffs in Washington last week, there was one country that was conspicuously absent from his list: Russia. The White House’s argument was that there was no point slapping tariffs on trade with Moscow because the existing sanctions in place against it meant there was negligible bilateral trade going on between the two countries. Despite this, the global trade war that has erupted will still impact Russia, threatening to undermine Moscow’s economic stability, stifle its already slowing growth and amplify its strategic dependence on Beijing. Trump’s trade realignments will further marginalise Russia as an energy supplier The White House’s justification for excluding Russia from

William Clouston

Why tariffs work

To travel by train through America’s rustbelt is to witness the real reason for Trump’s tariff revolution. Miles upon miles of derelict factories and decaying industrial architecture stand as monuments to trade policies which have gutted America’s manufacturing heartland and undermined the families – and the towns – which depended on it. In electing the Trump-Vance ticket last year American voters have called time on decades of elite indifference to industrial production and the liberal trade policies which have accompanied it. It turns out that the transitory profit secured by executives who out-sourced thousands of US industrial jobs to cheaper jurisdictions is no compensation for the loss of your industrial

Tim Knox

Is the ‘Office for Value for Money’ just another quango?

Who can possibly be against any attempt by any government of any political colour to get better value of money? After all, public sector productivity – which has been basically flat over the last 25 years despite all the advantages of new technology – is at heart a question of doing just that. So we should all welcome that Rachel Reeves in her first budget set up the Office for Value for Money in the very heart of the Treasury. With its similar title to the Office for Budget Responsibility (which has of course been criticised for taking over responsibility for the budget), perhaps here at last would be a

Irwin Stelzer

Trump is tearing up the Old World Order – as promised

Seems there is a bit of ruckus on the stock markets of the largest capitalist country in the world, the one with deepest of all capital markets. Donald Trump has decided to lay waste to the globalised, market-based world trading order, and return to the protectionist state of affairs that served the nation so well in the 1930s. It would be foolish of me to join the army of talented prognosticators predicting a recession, unless it doesn’t happen, and the even braver ones who can see just how much each company’s earnings will be affected by the New World Trading Order, if the earnings indeed are affected. We do know

Hamish McRae

The crash is not as bad as it seems

It’s that moment of supreme uncertainty. We do however know the question. Is this a regular sell-off, with the S&P500 nudging into bear market territory, but then steadying in the next few months before a gradual recovery? Or is this a true crash, akin to those of October 1929, October 1987, October 2008, or most recently March 2020, in which case we are less than halfway down the peak? The strategists have of course been crawling over the data of previous crashes, but the analogies never really fit. There has not been a trade war akin to what may be developing now since the 1930s, when the world economy was

Monday

Michael Simmons Michael Simmons

Are Reeves’s fiscal rules really ‘ironclad’?

This afternoon, Keir Starmer recommitted to not raising income tax, VAT or employee National Insurance for the duration of this parliament. At the same time, he reiterated his support for Rachel Reeves’s ‘ironclad’ fiscal rules. Are both possible? Answering a question from GB News’s Chris Hope at a visit to the Jaguar Land Rover factory in the West Midlands the Prime Minister said: ‘We made that commitment in the manifesto and we were absolutely clear about it going into the Budget and the Spring Statement, and that is a commitment we’ve made and a commitment we will keep.’  In response to an earlier question from Sky, he also stood by

Freddy Gray Freddy Gray

Has Trump stopped the oligarchy?

21 min listen

Global financial markets are experiencing significant declines following the announcement of new tariffs by President Trump. These tariffs led to widespread panic among investors and sparked debates about their potential impact on the economy.​ In this episode of Americano, host Freddy Gray is joined by Joe Weisenthal, co-host of Bloomberg’s Odd Lots podcast, to discuss the ramifications of these tariffs. They delve into the immediate market reactions, including a brief $4 trillion surge driven by a misinterpreted news clip, and analyse the underlying motives and potential consequences of the administration’s trade policies.

Matthew Lynn

Rachel Reeves could be Trump’s first tariff crash victim

There will be plenty of victims of the crash currently playing out across the global financial markets. A few hedge funds may well fail. The trading desks of the main investment banks will be watching their annual bonuses disappear. And ordinary investors will be nursing some big losses on their investment portfolios. But the most prominent victim might well be the British Chancellor Rachel Reeves. She staked everything on meeting her ‘fiscal rules’ – and it now looks certain her gamble has been lost.  Only a few weeks ago, in the Spring Statement, Reeves reassured everyone that she had made all the adjustments necessary to make sure she stayed within

Ross Clark Ross Clark

Why are sports cars being exempted from net zero rules?

You can carry on burning petrol and diesel in your car so long as it is a pricey, niche sports car. If you are a pleb who can only afford a family hatchback, on the other hand, you will have to convert to electric – and the government will pretend that it is saving you money. That just about sum up the government’s new policy on electric vehicles. The Zero Emission Vehicle mandate will be relaxed, but mostly for car manufacturers who produce fewer than 2,500 cars a year, who will be given a free pass. Given that these manufacturers – like Aston Martin – tend to be at the

Sunday

Michael Simmons Michael Simmons

Is Trump stoking a global recession?

This week, Donald Trump steered the global economy away from the free trade era that has underpinned growth for decades. Within hours of his announcement of tariffs on what looked like a bookmakers board from Aintree, China had responded with its own: a 34 per cent tax on all US imports starting next Thursday. The markets were horrified. US stocks suffered their worst week since 2020, with the S&P 500 shedding over $5 trillion in value. Over the course of the week, the index fell just over nine per cent. For context: at this point after their election wins, the S&P was up 9 per cent for Obama’s second term,

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