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The US military is tracking a suspected Chinese spy balloon that has been flying over northwestern America in recent days.

A senior defence official said the US has “very high confidence” it is a Chinese high-altitude balloon and was flying over sensitive sites to collect information.

“Clearly the intent of this balloon is for surveillance,” the official said.

Beijing did not immediately deny it belonged to them.

Chinese foreign ministry spokesperson Mao Ning said: “We are learning about the verification of this matter.

“We hope both sides can handle the matter calmly and prudently.

“I would like to emphasise that until the facts are clarified, speculation and hype will not be helpful to the proper resolution of the issue.”

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The balloon was spotted over Billings, Montana, on Wednesday – close to one of the US’s three nuclear missile silo fields at Malmstrom Air Force Base.

It also flew over the Aleutian Islands, off the coast of Alaska, and through Canada.

The balloon is still in US airspace but officials declined to say where it is now.

They acknowledged it was operating above civilian air traffic and below “outer space” but declined to say how high it was flying.

Military and defence leaders have considered shooting the balloon out of the sky but decided against it due to the potential safety risk from falling debris.

US defence secretary Lloyd Austin convened a meeting of senior military and defence leaders to review the threat profile of the balloon and possible responses, which were presented to US President Joe Biden on Wednesday.

The US has engaged Chinese officials “with urgency” and communicated the seriousness of the situation.

A high-altitude balloon floats over Billings in Montana but the Pentagon would not confirm whether it was the surveillance balloon
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The Pentagon would not confirm that the balloon in the photo was the surveillance balloon. Pic: AP

Read more: Mike Pompeo: China ‘wants world dominance and is a bigger threat than Vladimir Putin’

Pentagon press secretary Brigadier General Patrick Ryder said: “The United States government has detected and is tracking a high-altitude surveillance balloon that is over the continental United States right now.

“The US government to include NORAD (North American Aerospace Defense Command), continues to track and monitor it closely.

“The balloon is currently travelling at an altitude well above commercial air traffic and does not present a military or physical threat to people on the ground.

“Instances of this kind of balloon activity have been observed previously over the past several years.

“Once the balloon was detected, the US government acted immediately to protect against the collection of sensitive information.”

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How could a China-Taiwan war hurt the economy?

‘Potential second incident’

Canada’s national defence said Canadians are safe and that officials are taking steps to ensure the security of its airspace, including the monitoring of “a potential second incident”.

“NORAD, the Canadian Armed Forces, the Department of National Defence, and other partners have been assessing the situation and working in close coordination,” the statement said.

“Canada’s intelligence agencies are working with American partners and continue to take all necessary measures to safeguard Canada’s sensitive information from foreign intelligence threats.

“We remain in frequent contact with our American allies as the situation develops.”

China and the US have experienced tensions of late, clashing over Taiwan and China’s human rights record and its military activity in the South China Sea.

US Secretary of State Antony Blinken is expected to travel to China in the coming days.

It is not clear if this will affect his travel plans, which the State Department has not formally announced.

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Stock markets slump for second day running after Trump announces tariffs – in worst day for indexes since COVID

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Stock markets slump for second day running after Trump announces tariffs - in worst day for indexes since COVID

Worldwide stock markets have plummeted for the second day running as the fallout from Donald Trump’s global tariffs continues.

While European and Asian markets suffered notable falls, American indexes were the worst hit, with Wall Street closing to a sea of red on Friday following Thursday’s rout – the worst day in US markets since the COVID-19 pandemic.

As it happened: Worst week’s trading in five years

All three of the US’s major indexes were down by more than 5% at market close; The Dow Jones Industrial Average plummeted 5.5%, the S&P 500 was 5.97% lower, and the Nasdaq Composite slipped 5.82%.

The Nasdaq was also 22% below its record-high set in December, which indicates a bear market.

Read more: What’s a bear market?

Ever since the US president announced the tariffs on Wednesday evening, analysts estimate that around $4.9trn (£3.8trn) has been wiped off the value of the global stock market.

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Mr Trump has remained unapologetic as the markets struggle, posting in all-caps on Truth Social before the markets closed that “only the weak will fail”.

The UK’s leading stock market, the FTSE 100, also suffered its worst daily drop in more than five years, closing 4.95% down, a level not seen since March 2020.

And the Japanese exchange Nikkei 225 dropped by 2.75% at end of trading, down 20% from its recent peak in July last year.

Pic: Reuters
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US indexes had the worst day of trading since the COVID-19 pandemic. Pic: Reuters

Trump holds trade deal talks – reports

It comes as a source told CNN that Mr Trump has been in discussions with Vietnamese, Indian and Israeli representatives to negotiate bespoke trade deals that could alleviate proposed tariffs on those countries before a deadline next week.

The source told the US broadcaster the talks were being held in advance of the reciprocal levies going into effect next week.

Vietnam faced one of the highest reciprocal tariffs announced by the US president this week, with 46% rates on imports. Israeli imports face a 17% rate, and Indian goods will be subject to 26% tariffs.

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Do Trump’s tariffs add up?

Read more:
Markets gave Trump a clear no-confidence vote
There were no winners from Trump’s tariff gameshow

China – hit with 34% tariffs on imported goods – has also announced it will issue its own levy of the same rate on US imports.

Mr Trump said China “played it wrong” and “panicked – the one thing they cannot afford to do” in another all-caps Truth Social post earlier on Friday.

Later, on Air Force One, the US president told reporters that “the beauty” of the tariffs is that they allow for negotiations, referencing talks with Chinese company ByteDance on the sale of social media app TikTok.

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Tariffs: Xi hits back at Trump

He said: “We have a situation with TikTok where China will probably say, ‘We’ll approve a deal, but will you do something on the tariffs?’

“The tariffs give us great power to negotiate. They always have.”

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Financial markets were always going to respond to Trump tariffs but they’re also battling with another problem

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Financial markets were always going to respond to Trump tariffs but they're also battling with another problem

Global financial markets gave a clear vote of no-confidence in President Trump’s economic policy.

The damage it will do is obvious: costs for companies will rise, hitting their earnings.

The consequences will ripple throughout the global economy, with economists now raising their expectations for a recession, not only in the US, but across the world.

Tariffs latest: FTSE 100 suffers biggest daily drop since COVID

Financial investors had been gradually re-calibrating their expectations of Donald Trump over the past few months.

Hopes that his actions may not match his rhetoric were dashed on Wednesday as he imposed sweeping tariffs on the US’ trading partners, ratcheting up protectionism to a level not seen in more than a century.

Markets were always going to respond to that but they are also battling with another problem: the lack of certainty when it comes to Trump.

More on Donald Trump

He is a capricious figure and we can only guess his next move. Will he row back? How far is he willing to negotiate and offer concessions?

Read more:
There were no winners from Trump’s tariff gameshow
Trade war sparks ‘$2.2trn’ global market sell-off

These are massive unknowns, which are piled on to uncertainty about how countries will respond.

China has already retaliated and Europe has indicated it will go further.

That will compound the problems for the global economy and undoubtedly send shivers through the markets.

Much is yet to be determined, but if there’s one thing markets hate, it’s uncertainty.

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Court confirms sacking of South Korean president who declared martial law

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Court confirms sacking of South Korean president who declared martial law

South Korea’s constitutional court has confirmed the dismissal of President Yoon Suk Yeol, who was impeached in December after declaring martial law.

His decision to send troops onto the streets led to the country’s worst political crisis in decades.

The court ruled to uphold the impeachment saying the conservative leader “violated his duty as commander-in-chief by mobilising troops” when he declared martial law.

The president was also said to have taken actions “beyond the powers provided in the constitution”.

Demonstrators who stayed overnight near the constitutional court wait for the start of a rally calling for the president to step down. Pic: AP
Image:
Demonstrators stayed overnight near the constitutional court. Pic: AP

Supporters and opponents of the president gathered in their thousands in central Seoul as they awaited the ruling.

The 64-year-old shocked MPs, the public and international allies in early December when he declared martial law, meaning all existing laws regarding civilians were suspended in place of military law.

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Highs and lows of Five-Year Keir
MP tells Sky News she was targeted online by Tate brothers

More on South Korea

The Constitutional Court is under heavy police security guard ahead of the announcement of the impeachment trial. Pic: AP
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The court was under heavy police security guard ahead of the announcement. Pic: AP

After suddenly declaring martial law, Mr Yoon sent hundreds of soldiers and police officers to the National Assembly.

He has argued that he sought to maintain order, but some senior military and police officers sent there have told hearings and investigators that Mr Yoon ordered them to drag out politicians to prevent an assembly vote on his decree.

His presidential powers were suspended when the opposition-dominated assembly voted to impeach him on 14 December, accusing him of rebellion.

The unanimous verdict to uphold parliament’s impeachment and remove Mr Yoon from office required the support of at least six of the court’s eight justices.

South Korea must hold a national election within two months to find a new leader.

Lee Jae-myung, leader of the main liberal opposition Democratic Party, is the early favourite to become the country’s next president, according to surveys.

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